Rules-Based Fiscal Policy in France, Germany, Italy, and Spain

Teresa Daban Sanchez, Steven Symansky, Gian Maria Milesi-Ferretti (gmilesiferretti@brookings.edu), Enrica Detragiache (edetragiache@gmail.com) and C. Di Bella (gdibella@imf.org)

No 2003/009, IMF Occasional Papers from International Monetary Fund

Abstract: Fiscal rules can help to counteract the deficits and spending biases that too often originate in the political process. Rules that constrain spending--rather than the balance--allow fiscal policy to be countercyclical. Yet the design of effective spending rules is by no means straightforward. Should a rule be real or nominal? How comprehensive should the definition of spending be? What safeguards ensure the credibility of a rule? How do rules work in decentralized systems where regions and states are partially autonomous? France, Germany, Italy, and Spain--countries that could benefit from more emphasis on fiscal rules to constrain spending--are explored here as case studies.

Keywords: OP; spending rule; deficit; spending; rule; debt target; expenditure rule; fiscal policy measure; private sector response; Fiscal rules; Fiscal stance; Western Europe (search for similar items in EconPapers)
Pages: 46
Date: 2003-11-14
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Citations: View citations in EconPapers (8)

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