The working mechanism of national fiscal rules depends strongly on whether a government must comply with its own rules or inherited ones. In the former case, a government usually introduces fiscal rules to show its commitment to a disciplined fiscal policy (the signaling function). In the latter...

Congress has expressed interest, one way or the other, in a balanced-budget requirement for the past six decades. Yet despite numerous attempts, the legislative body has never passed a constitutional balanced-budget amendment. Most of the analysis of why we don't yet have a constitutional...

The paper discusses the impact of austerity policy on economic performance in the eurozone countries after the global crisis that occurred in 2007-08. The undertaken fiscal consolidation efforts to cut government expenditure and increase government taxes which begun in 2010, aimed to return...

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...

The recent judgment of the German Federal Constitutional Court has clarified that the debt brake enshrined in the German Basic Law (Grundgesetz) is intended to do exactly what the legislature intended when it was adopted in 2009: to tie the hands of political actors and block the 'easy way out...

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...

The COVID-19 pandemic and the pressure it has created on member states’ public finances have led European authorities to suspend the EU’s fiscal rules. In fact, these rules had long been criticised by academics and had only been abided by exceptionally. Beyond the rules themselves, the...

Public Accounts Committees (PACs) has significant role to play in enhancing oversight and accountability for the use of public funds. This paper discusses the role of PACs in promoting effective, efficient and economic (EEEs) use of public resources for the benefit of the public. It also...

In this article, I revisit the evidence in favor of the fiscal illusion hypothesis, as presented in Young (2009) for the period 1959 Q3–2007Q4. According to Young, the tax and spend variables are integrated of order one and share a long-term linear common trend (cointegration). He attempts to...