Future-oriented fiscal policy

States that seek to confront today's great challenges, from demographic change to the green transition, need to grasp the relevance of fiscal policy in order to move from stasis into action. This article puts the current fiscal rules in Germany into context and identifies three requirements that a framework of future-oriented fiscal policy will have to meet, by bringing together diverse research findings from recent years. Central requirements are that, first, it needs to be flexible and give room for reaction in an era of quickly changing economic circumstances, overlapping crisis, and sudden advances in academic research. Second, it needs to promote a fair distribution of resources, preserving the livelihoods of future generations and bringing forward a more equal distribution across different socio-economic groups. Third, it has to centre on material capacities, putting the advancement of effective state structures and real economic potential at the core of its thinking.