This paper analyses the impact of fiscal rules on different public spending categories, namely public expenditure and investment, at the subnational level in Europe. Building on the notion of the deficit bias, we suspect that in the presence of fiscal rules, politicians have an incentive to...

During the last quarter of 2008, state pension funds fell in value by approximately $350 billion. Depending on the state, the losses were equivalent to as little as 12% of the own revenue (taxes, fees, and charges) generated by the state government in the previous fiscal year, or as much as 68%....

The financial crisis and recession have left a legacy of unusually large fiscal deficits and growing sovereign debt levels in most advanced economies. The paper uses recent research from the IMF to throw light on two questions: how much fiscal space is available to advanced countries before they...

In the first part of the paper are presented general aspects regarding budgetary priority establishment. The yearly achievable budgetary revenues cannot cover entirely the expenditures, being necessary the sorting of them in concordance with budgetary priorities from the Government’s program....

This article examines the German debt brake from a technical point of view. By designing the debt brake on the basis of the EU method, it should be possible to achieve an adequate division between the cyclical and structural components of the budget balance, while at the same time pursuing a...

We construct the first comprehensive dataset of contingent liability realizations in advanced and emerging markets for the period 1990-2014. We find that contingent liability realizations are a major source of fiscal distress. The average fiscal cost of a contingent liability realization is 6...

Deficits and debts are very complex issues for eternal public debate. The norm of budget balance - whether as a value judgment or ideal, as a political symbol or as a budgetary principle - often appears in literature and public debate over federal budgetary and fiscal policies. This paper offers...

Should a government have more than one fiscal rule constraining fiscal aggregates? If so, why? In this paper, we present a dynamic general equilibrium model of a small open economy featuring an incumbent government to assess how and why implementing a budget balance rule and a debt anchor rule...

Over the past three decades, large and persistent discrepancies between the annual change in public debt and the budget deficit, so-called stock-flow adjustments, were a prominent feature of debt dynamics in many economies. The aim of this paper is to investigate the underlying determinants of...

Many economic studies analyse the impact of fiscal rules and discuss their effectiveness in limiting excessive debt. A majority of these studies, however, neglects or only deals insufficiently with the potential issue of endogeneity. In this paper, we propose a novel identification approach...