The SGP and the ‘Golden Rule’

Fabrizio Balassone and Daniele Franco

Chapter 15 in The Stability and Growth Pact, 2001, pp 371-393 from Palgrave Macmillan

Abstract: Abstract The slowdown in growth in 1998 and its possible implications for the level of unemployment raised worries and doubts concerning the fiscal rules set in the Treaty of Maastricht and in the Stability and Growth Pact. It has been argued that these rules may represent an excessively binding constraint for appropriate counter-cyclical action and that the attempt to reach rapidly a budget position ‘close to balance or in surplus’ may worsen the slowdown. The risk that the rules may permanently reduce the public sector’s contribution to capital accumulation has also been pointed out.

Keywords: Public Investment; Golden Rule; Debt Ratio; Public Capital; Fiscal Consolidation (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-62926-4_15

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DOI: 10.1057/9780230629264_15

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