Fiscal Policy Dynamics with a Public-Debt Guideline

Zvi Hercowitz () and Michel Strawczynski

Working Papers from Tel Aviv

Abstract: This paper analyzes the implications of a cost of deviating upwards from a public-debt/output guideline, as the 0.6 ratio in the Maastricht Treaty, in the context of a fiscal policymaking model. Given a pre-announced timetable for enforcement, the dynamic paths of the tax rate and government spending, which depart from smoothing over time, and the public debt are characterized.

Keywords: PUBLIC DEBT; TAXATION; POLICY MAKING (search for similar items in EconPapers)
JEL-codes: E62 H63 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2001
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Citations: View citations in EconPapers (2)

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Journal Article: FISCAL POLICY DYNAMICS WITH A PUBLIC-DEBT GUIDELINE (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:teavfo:2001-1

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