Fiscal Rules in Economic Crisis: The Trade-off Between Consolidation and Recovery, from a European Perspective
In this study, we will perform a simulation exercise to investigate whether the use of explicit fiscal rules improves the macroeconomic performance in the economic framework of the European Union (EU), where the fall in income levels occurred very asymmetrically, and this has accentuated the social...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
De Gruyter
2021-12-01
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| Series: | Economics: Journal Articles |
| Subjects: | |
| Online Access: | https://doi.org/10.1515/econ-2021-0013 |
| _version_ | 1828464107626430464 |
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| author | Díaz-Roldán Carmen Filho Fernando Ferrari da Silva Bichara Julimar |
| author_facet | Díaz-Roldán Carmen Filho Fernando Ferrari da Silva Bichara Julimar |
| author_sort | Díaz-Roldán Carmen |
| collection | DOAJ |
| description | In this study, we will perform a simulation exercise to investigate whether the use of explicit fiscal rules improves the macroeconomic performance in the economic framework of the European Union (EU), where the fall in income levels occurred very asymmetrically, and this has accentuated the social inequality that existed before the recent crises. To evaluate the performance of fiscal rules, we will allow for a fiscal rule keeping the growth of the public expenditure below the growth of the inflation. This special design of the fiscal rule is a novelty in the European context, although the inflation constraint has been successfully implemented in other countries as, for example, Brazil. As the results, we expect to find that before the financial crisis of 2008, the EU public finances keep relatively stable. However, after the crisis, the budget of the member states suffered a significant deterioration. In addition, therefore, we will discuss to which extent the use of proper fiscal rules could help to rationalize fiscal consolidation efforts. |
| first_indexed | 2024-12-11T03:05:35Z |
| format | Article |
| id | doaj.art-bf2e62ddb1934a8fa84c2d8cb86bb633 |
| institution | Directory Open Access Journal |
| issn | 1864-6042 |
| language | English |
| last_indexed | 2024-12-11T03:05:35Z |
| publishDate | 2021-12-01 |
| publisher | De Gruyter |
| record_format | Article |
| series | Economics: Journal Articles |
| spelling | doaj.art-bf2e62ddb1934a8fa84c2d8cb86bb6332022-12-22T01:22:57ZengDe GruyterEconomics: Journal Articles1864-60422021-12-0115119921610.1515/econ-2021-0013Fiscal Rules in Economic Crisis: The Trade-off Between Consolidation and Recovery, from a European PerspectiveDíaz-Roldán Carmen0Filho Fernando Ferrari1da Silva Bichara Julimar2Department of Economics, Universidad de Castilla-La Mancha, Instituto de Economía Internacional, Ciudad Real, SpainDepartment of Economics and International Relations, Universidade Federal do Rio Grande do Sul, Porto Alegre, Conselho Nacional de Desenvolvimento Científico e Tecnológico, Brasília, Porto Alegre, BrazilDepartment of Estructura Económica y Economía del Desarrollo, Universidad Autónoma de Madrid, Madrid, SpainIn this study, we will perform a simulation exercise to investigate whether the use of explicit fiscal rules improves the macroeconomic performance in the economic framework of the European Union (EU), where the fall in income levels occurred very asymmetrically, and this has accentuated the social inequality that existed before the recent crises. To evaluate the performance of fiscal rules, we will allow for a fiscal rule keeping the growth of the public expenditure below the growth of the inflation. This special design of the fiscal rule is a novelty in the European context, although the inflation constraint has been successfully implemented in other countries as, for example, Brazil. As the results, we expect to find that before the financial crisis of 2008, the EU public finances keep relatively stable. However, after the crisis, the budget of the member states suffered a significant deterioration. In addition, therefore, we will discuss to which extent the use of proper fiscal rules could help to rationalize fiscal consolidation efforts.https://doi.org/10.1515/econ-2021-0013fiscal rulesconsolidationcrisisf45h62h68 |
| spellingShingle | Díaz-Roldán Carmen Filho Fernando Ferrari da Silva Bichara Julimar Fiscal Rules in Economic Crisis: The Trade-off Between Consolidation and Recovery, from a European Perspective Economics: Journal Articles fiscal rules consolidation crisis f45 h62 h68 |
| title | Fiscal Rules in Economic Crisis: The Trade-off Between Consolidation and Recovery, from a European Perspective |
| title_full | Fiscal Rules in Economic Crisis: The Trade-off Between Consolidation and Recovery, from a European Perspective |
| title_fullStr | Fiscal Rules in Economic Crisis: The Trade-off Between Consolidation and Recovery, from a European Perspective |
| title_full_unstemmed | Fiscal Rules in Economic Crisis: The Trade-off Between Consolidation and Recovery, from a European Perspective |
| title_short | Fiscal Rules in Economic Crisis: The Trade-off Between Consolidation and Recovery, from a European Perspective |
| title_sort | fiscal rules in economic crisis the trade off between consolidation and recovery from a european perspective |
| topic | fiscal rules consolidation crisis f45 h62 h68 |
| url | https://doi.org/10.1515/econ-2021-0013 |
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