Rule-Based Versus Discretionary Fiscal Policy
Tomasz Grabia
Department of Microeconomics, Faculty of Economics and Sociology, University of LodzRésumé
Fiscal policy can be of a discretionary or rule-based nature. This article discuses selected examples of fiscal rules as well as presents the advantages and disadvantages of following them. The aim of the article is to solve dilemmas about the positive and negative consequences of strict regulations of contemporary fiscal policy. Therefore, a hypothesis is tested concerning whether the following of rules in macroeconomic policy is a more beneficial solution than carrying out a discretionary policy. The hypothesis was not clearly verified. On the one hand, it was stated that it is usually more beneficial to follow standard rules due to higher reliability for markets. On the other hand, that entails lower flexibility, which may be especially disadvantageous during a crisis.
Mots-clés :
Maastricht Treaty, fiscal rules, discretionary fiscal policy, credibility of fiscal policy, flexibility of fiscal policyRéférences
Alesina A., Tabellini G. 1990. A Positive Theory of Fiscal Deficits and Government Debt. Review of Economic Studies, 57(3): 403-414.
Ball L., Mankiw N.G. 2002. The NAIRU in Theory and Practice. NBER Working Paper, No. 8940, Cambridge.
Convergence Report June 2014. 2014. European Central Bank, Frankfurt am Main.
Convergence Programme 2014 update. 2014. Republic of Poland, Warsaw.
Convergence Programme of the Czech Republic. 2015. Ministry of Finance of the Czech Republic, Prague.
Convergence Programme of Hungary 2014-2017. 2014. Ministry of Hungary, Budapest.
Działo J. 2009. Polityczne uwarunkowania jakości instytucji fiskalnych. Wydawnictwo UŁ, Łódź.
Favero C., Monacelli T. 2005. Fiscal Policy Rules and Regime. In: Stability: Evidence from the U. S. Working Paper Series. Innocenzo Gasparini Institute for Economic Research.
Information Note on the EU Fiscal Compact Treaty May 2012. NERI.
Kell M. 2001. An Assessment of Fiscal Rules in the United Kingdom. IMF Working Paper. international Monetary Fund, July.
Kopits G. 2001. Fiscal Rules: Useful Policy Framework on Unnecessary Ornamental Rules in the United Kingdom. IMF Working Paper. International Monetary Fund, September.
Kopits G., Symansky S. 1998. Fiscal Policy Rules. IMF Occasional Paper, No. 162.
Mackiewicz M. 2006. Problem wyboru reguł polityki fiskalnej w warunkach gospodarki polskiej. Wydawnictwo UŁ, Łódź.
Mankiw N.G., Taylor M.P. 2009. Makroekonomia. Polskie Wydawnictwo Ekonomiczne, Warszawa.
Stability Programme of the Slovak Republik for 2014-2017. 2014. Ministry of the Slovak Republik, Bratislava.
Taylor J.B. 2000. Reassessing Discretionary Fiscal Policy. The Journal of Economic Perspectives, 14(3): 21-36.
Taylor J.B. 2010. Getting Back on Track: Macroeconomic Policy Lessons from the Financial Crisis. Review, Federal Reserve Bank of St. Louis.
Treaty on European Union. 1992. Council of the European Communities, Commission of the European Communities, Luxembourg: Office for Official Publications of the European Communities.
http://epp.eurostat.ec.europa.eu.
Department of Microeconomics, Faculty of Economics and Sociology, University of Lodz
Licence
An Author declares that his paper has not been published before (under the same or another title, or is a part of another publication) and does not infringe copyrights of other persons**. At the same time, the Author transfers to the Publisher the exclusive right to publish and to circulate this work in print in the form of a non-serial journal publication and in a form of an electronic publication.
The journal is available on Creative Common license CC-BY-NC-ND
