The structural balance: origins, developments and applications in the European Union

Giovanni Carnazza ()
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Giovanni Carnazza: Università degli Studi Roma Tre, Dipartimento di Economia

Argomenti, 2018, vol. 11, issue 11, 1-25

Abstract: Under the Fiscal Compact, a key obligation is the balanced budget rule. This obligation contains in itself elements of flexibility expressing the latter in structural terms. Actually, the hypothetical fiscal room is limited by the particular methodology adopted by the European Commission. A modification of this methodology should be accompanied by a more general rethinking of the reasonableness of using the structural balance as a benchmark through which to assess fiscal sustainability. Starting with Browns 1956 contribution, the present work reconstructs the origins and developments of this indicator, highlighting the critical points within the current framework of European rules.

Keywords: budget balance; structural balance; business cycle. (search for similar items in EconPapers)
JEL-codes: H20 H50 H61 H62 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:urb:journl:v:11:y:2018:p:1-25

DOI: 10.14276/1971-8357.1802

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