THE ROLE OF NATIONAL AND SUPRANATIONAL FISCAL RULES - INTERNATIONAL EVIDENCE AND SITUATION IN THE CZECH REPUBLIC

Ales Melecky and Martin Machacek

Journal of Applied Economic Sciences, 2010, vol. 5, issue 4(14)/ Winter 2010, 375-382

Abstract: This paper summarizes recent international evidence on the design, functioning and effects of fiscal rules. Special attention is paid to small open economies such as the Czech Republic. This paper (1) discusses pros and cons of the rules focusing on different types of fiscal constraints (e.g., budget balances, debt, expenditures, and revenue); (2) surveys their impact on key macroeconomic variables; and (3) considers with the efficiency of fiscal rules vis-a-vis the current financial crisis. In this context, representative national and supranational fiscal rules are also reviewed with an emphasis on the enforceability of such rules. This includes an evaluation of (1) the Czech Republic’s fiscal targeting mechanism and medium-term expenditure framework introduced in 2003 and (2) the EU fiscal rules adopted by the Czech Republic in 2004. Finally, current debates on the future of fiscal policy rules inside and outside of the Czech Republic are briefly considered.

Keywords: fiscal rules; fiscal policy; debt; expenditure framework; Czech Republic (search for similar items in EconPapers)
JEL-codes: E62 H50 H60 O23 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ush:jaessh:v:5:y:2010:i:4(14)_winter2010:p:121

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