Fiscal Targets, Automatic Stabilisers and their Effects on Output

Ray Barrell, Ian Hurst and Álvaro Pina

No 2002/05, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: In this paper we review the European macroeconomic policy framework, and address the issue of setting safe deficit targets - targets that make it very unlikely that a country exceeds the 3 per cent ceiling of the Stability and Growth Pact. In this context, the scope for an increase in public investment is discussed. We also look at automatic stabilizers and argue that their ability to smooth output depends on the kind of disturbance that hits the economy.

Keywords: Automatic stabilizers; Stability and Growth Pact; fiscal targets; public investment. (search for similar items in EconPapers)
JEL-codes: E61 E62 H61 (search for similar items in EconPapers)
Date: 2002
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (7)

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More papers in Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa Department of Economics, ISEG - Lisbon School of Economics and Management, Universidade de Lisboa, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL.
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