Flexible and standard fiscal rules in context of stability of public finances

Agnieszka Przybylska-Mazur

International Journal of Monetary Economics and Finance, 2020, vol. 13, issue 4, 417-427

Abstract: The main objectives of fiscal policy are to achieve balanced budget over the business cycle and to achieve the stability of public finances: general government debt and general government deficit. One way of fiscal decision making is decision based on the numerical rule. The basis of the analysis is debt brake rule - an example of the fiscal rule applied for the first time in Switzerland. Thus, the objective of this paper is to present of the modification of expenditure rule that is the core of debt brake rule and to take into account an exceptional circumstance in it. Making empirical analysis we compare the maximum expenditure levels calculated on the basis of a flexible and standard fiscal rules, general government deficit and debt. We present the results for one of the countries of the European Union - for Poland.

Keywords: fiscal rule; flexible fiscal rule; standard fiscal rule; exceptional circumstances; debt brake rule; general government deficit; general government debt; stability of public finances; Poland; maximum level of total expenditures; Maastricht criteria. (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijmefi:v:13:y:2020:i:4:p:417-427

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