How to Calibrate Fiscal Rules: A Primer

Luc Eyraud, Anja Baum, Andrew Hodge, Mariusz Jarmuzek, H. Elif Ture, Samba Mbaye and Young-Bae Kim

No 2018/002, IMF Fiscal Affairs Department from International Monetary Fund

Abstract: This note provides guidance on how to calibrate fiscal rules, that is, how to determine the thresholds (ceiling, floor, or target) for specific fiscal aggregates constrained by rules. The note focuses, more specifically, on the calibration of the debt, balance, and expenditure rules. The note is divided into four sections. The first section discusses general principles used to calibrate rules. The second section reports international evidence on the numerical ceilings used in existing rules. The third and fourth sections provide guidance on the calibration of the debt ceiling and the operational rules (fiscal balance and expenditure rules). This is one of two guidance notes on the design of fiscal rules; the other one focuses on rule selection. The two exercises are linked: if a fiscal framework had to be built from scratch, rules would need to be selected and calibrated at the same time.

Keywords: IMF multimedia service; publication order; publication service; debt rule ceiling; debt target; Fiscal stance; Debt limits; Fiscal rules; Global; Eastern Europe (search for similar items in EconPapers)
Pages: 28
Date: 2018-03-15
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=45551 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfhtn:2018/002

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Fiscal Affairs Department from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().