The Golden Rule and the Economic Cycles /

The present formulation of the golden rule in the United Kingdom allows fiscal performance to be tested explicitly on an ex-post basis. However, it requires precise dating of the economic cycle, which can lead to significant controversy. Also, the need to aim for current balance or better "over...

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Bibliografiske detaljer
Hovedforfatter: Honjo, Keiko
Format: Tidsskrift
Sprog:English
Udgivet: Washington, D.C. : International Monetary Fund, 2007.
Serier:IMF Working Papers; Working Paper ; No. 2007/199
Online adgang:Full text available on IMF
Beskrivelse
Summary:The present formulation of the golden rule in the United Kingdom allows fiscal performance to be tested explicitly on an ex-post basis. However, it requires precise dating of the economic cycle, which can lead to significant controversy. Also, the need to aim for current balance or better "over the cycle" may force fiscal policy to be procyclical toward the end of cycles. Using dynamic stochastic simulations, the paper suggests that making the formulation of the golden rule forward-looking and independent of the dating of the economic cycle would reduce the risk of procyclicality and enhance macroeconomic stability.
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Fysisk beskrivelse:1 online resource (23 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Adgang:Electronic access restricted to authorized BRAC University faculty, staff and students