Beyond the SGP: Features and Effects of EU National-Level Fiscal Rules

Vertical effects of fiscal rules: the Swiss experience

“…Gollwitzer, 2010), OECD countries (e.g. Guichard et al, 2007), EU countries (e.g., De Haan et al, 1999;Ayuso-i-Casals et al, 2007;Debrun et al, 2008;Marneffe et al, 2011;Foremny, 2014) and a panel of industrial and emerging economies (e.g. Singh and Plekhanov, 2006).…”

National numerical fiscal rules: Not complied with, but still effective?

“…7 For the US, Poterba (1994), Alt and Lowry (1994), Roubini and Sachs (1989) find that more stringent fiscal rules are associated with a higher speed of reduction of unexpected deficits. With regard to the goal of achieving a lower overall budget deficit, there is supporting evidence for the US by Bohn and Inman (1996), Canova and Pappa (2006) and Alesina and Bayoumi (1996); for Canada by Imbeau and Tellier (2004); for Latin America by Alesina et al (1999); for Switzerland by Feld and Kirchgässner (2006) and Krogstrup and Wälti (2008); for OECD countries by Perotti and Kontopoulos (2002), Dahan and Strawczynski (2010), and Guichard et al (2007); for EU countries by Hallerberg and von Hagen (1999), Von Harden (1994), De Haan et al (1999), Deroose et al (2006), Fabrizio and Mody (2006), Ayuso-i-Casals et al (2007) and Debrun et al (2008). 8 Studies using different approaches, without composite indices or binary indicators, to analyse the effect of fiscal rules are e.g.…”

The impact of national fiscal rules on the stabilisation function of fiscal policy

“…The use of panel data by Rother (2004) constitutes an exception, but he only deals with inflation volatility and does not investigate the role played by fiscal rules as we do in the second part of the empirical analysis. 7 Note that we purposely leave out of the analysis supranational fiscal rules, as their effectiveness has been questioned by many, particularly in the countries adhering to the eurozone (Wyplosz 2006;Ayuso-i-Casals et al 2007;Debrun and Kumar 2007). 6 the relationship between the former and inflation volatility. Finally, section 5 concludes and provides some policy implications.…”