New life for an old framework: redesigning the European Union's expenditure and golden fiscal rules

Zsolt Darvas and Julia Anderson

Corvinus Economics Working Papers (CEWP) from Corvinus University of Budapest

Abstract: In the context of the review of the EU economic governance framework, this study recommends a multi-year ahead expenditure rule anchored in an appropriate public debt target, augmented with an asymmetric golden rule that provides extra fiscal space only in times of a recession. An improved governance framework should strengthen national fiscal councils and include a European fiscal council, while financial sanctions should be replaced with instruments related to surveillance, positive incentives, market discipline and increased political cost of noncompliance.

Keywords: expenditure rule; golden rule; structural budget balance (search for similar items in EconPapers)
JEL-codes: E62 H20 (search for similar items in EconPapers)
Date: 2020-10-20
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:cvh:coecwp:2020/05

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