The Return to Fiscal Rules

Francesca Caselli, Hamid Davoodi, Carlos Goncalves, Gee Hee Hong, Andresa Lagerborg, Paulo Medas, Anh Nguyen, Jiae Yoo

Governments face difficult policy trade-offs with record debt levels, tightening monetary policies, and urgent demands, including food and energy crises, the climate agenda, and population aging. Governments need to communicate fiscal plans to reduce debt sustainability risks and promote consistent macroeconomic policies. Many envisage a return to fiscal rules that had been suspended during the pandemic to strengthen credibility. This situation offers an opportunity to rethink fiscal rules and determine how governments can make fiscal policy more agile, including in responding to crises, without undermining fiscal sustainability. A risk-based medium-term fiscal framework that combines standards, rules, and strengthened institutions would strike a better balance between flexibility and credibility

MoreLess

Year of publication:	2022
Authors:	Caselli, Francesca
Other Persons:	Davoodi, Hamid (contributor) ; Goncalves, Carlos (contributor) ; Hong, Gee Hee (contributor) ; Lagerborg, Andresa (contributor) ; Medas, Paulo (contributor) ; Nguyen, Anh (contributor)
Publisher:	Washington, D.C : International Monetary Fund
Subject:	Regelbindung versus Diskretion \| Rules versus discretion \| Finanzpolitik \| Fiscal policy \| Antizyklische Finanzpolitik \| Countercyclical fiscal policy \| Haushaltsdefizit \| Budget deficit \| Haushaltskonsolidierung \| Fiscal consolidation \| Welt \| World \| Zins \| Interest rate