Catenarian fiscal discipline

Hans Gersbach 04 January 2014

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Limiting the accumulation of public debt in democracies has always been a problem, but it has become a particularly pressing one in the last few decades. While there are normative justifications for public debt-making – such as letting automatic stabilisers and tax-smoothing measures operate (Barro 1979) – political processes tend to push public debt to levels that are likely to be socially undesirable.

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Topics:  Macroeconomic policy

Tags:  democracy, fiscal policy, debt, time inconsistency, fiscal discipline

Understanding Eurozone debt developments by nation

Gianluca Cafiso 05 January 2012

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Fiscal discipline looks set to start 2012 as it ended 2011: centre-stage in the Eurozone debate (Wyplosz 2011). While the fiscal compact agreed upon in December 2011 sets out new fiscal rules, many are expecting another round of emergency summits. This column studies the evolution of debt-to-GDP ratios in some of the EU’s most troubled economies in hopes of finding the right policy responses.

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Topics:  EU policies Europe's nations and regions

Tags:  Eurozone crisis, fiscal discipline

A fiscal union for the euro: Some lessons from history

Michael Bordo, Lars Jonung, Agnieszka Markiewicz 21 September 2011

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The current sovereign debt crisis in Europe, now threatening the existence of the euro, has revealed major faults in the design of the fiscal framework of the Eurozone. It has inspired a heated debate reflected in a steady flow of proposals concerning the proper rules and institutions for fiscal policymaking in the EU. The debate shows no sign of an emerging consensus (see for instance Gual 2011 and Wyplosz 2011 on this site).

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Topics:  EU policies Europe's nations and regions

Tags:  monetary union, Eurozone crisis, fiscal discipline