This paper characterises rules-based fiscal policy setting. Basically, we translate a standard monetary policy rule into a simple fiscal policy rule. We then infer on fiscal policymakers' reaction coefficients by testing the rule with GMM. Interaction is also tested directly by the inclusion of...

This paper characterises rules-based fiscal policy setting. Basically, we translate a standard monetary policy rule into a simple fiscal policy rule. We then infer on fiscal policymakers' reaction coefficients by testing the rule with GMM. Interaction is also tested directly by the inclusion of...

Fiscal rules aim at constraining public debt. In Sweden, a combination of procedural and numerical rules was introduced in response to the severe 1991 fiscal crisis. These rules have been effective: public debt has come down. The current fiscal framework does not rule out future fiscal crises,...