The recession under way in the European Union and the threat of deflation have spawned increasing frequent calls for modification of the Stability and Growth Pact. The present article confirms the negative correlation of the rate of real output growth with that of increase in current public...

We investigate the risk that the Stability and Growth Pact may act as a constraint on the fiscal policy of EMU Member States in three respects: a) discretionary counter-cyclical policy which finds a limit in the 3 per cent of GDP threshold set for nominal deficit; b) automatic stabilisers whose...

The core emphasis of rules-based fiscal legislation at the subnational level in India is to achieve debt sustainability through a numerical ceiling on borrowing and the use of borrowed resources for public capital investment by phasing out revenue deficits. Using the Arellano Bond Panel...