This paper reviews the design and operation of the Chilean fiscal rule in the past 30 years. Using different empirical approaches, we assess its impact on fiscal procyclicality, public debt, and public investment. While there has been substantial progress in building a modern institutional...

Fiscal authorities impose fiscal rules to achieve goals such as debt sustainability, avoiding fiscal procyclicality, and improving macroeconomic stability. Assessing the effectiveness of fiscal rules requires the construction of a counterfactual scenario depicting the situation in the absence of...