The paper takes stock of the debate on the positive link between output volatility and the size of government-which reflects automatic stabilizers. After a survey of the literature, we show that the contribution of automatic stabilizers to output stability may have disappeared since the 1990s....

The paper takes stock of the debate on the positive link between output volatility and the size of government-which reflects automatic stabilizers. After a survey of the literature, we show that the contribution of automatic stabilizers to output stability may have disappeared since the 1990s....

Intro -- Contents -- I. INTRODUCTION -- II. DEBT SUSTAINABILITY ANALYSIS AND RISK -- III. DEBT DYNAMICS AND THE CONDUCT OF FISCAL POLICY -- IV. RISKS TO DEBT SUSTAINABILITY IN FIVE EMERGING MARKET ECONOMIES -- V. CONCLUSION -- Appendix -- REFERENCES.

This paper discusses the role of fiscal institutions, including budget rules and non-partisan agencies, in enhancing fiscal discipline. A dynamic model of fiscal policy shows that optimal institutions lack credibility unless the costs to bypass them are sufficiently high. In our model, a...

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Institutions aimed at constraining policy discretion to promote sound fiscal policies are once again at the forefront of the policy debate. Interest in “fiscal councils,†independent watchdogs active in the public debate, has grown rapidly in recent years. This paper presents the first...

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