Fiscal rules with discretion for an economic union
dc.contributor.author | Sublet, Guillaume | |
dc.date.accessioned | 2024-02-26T13:21:35Z | |
dc.date.available | NO_RESTRICTION | fr |
dc.date.available | 2024-02-26T13:21:35Z | |
dc.date.issued | 2022-03-11 | |
dc.identifier.uri | http://hdl.handle.net/1866/32690 | |
dc.publisher | Université de Montréal. Département de sciences économiques | fr |
dc.subject | Fiscal rule | fr |
dc.subject | Discretion | fr |
dc.subject | Economic union | fr |
dc.subject | Sanctions | fr |
dc.subject | Exemptions | fr |
dc.subject | Delegation | fr |
dc.subject | Mechanism design without transfers | fr |
dc.title | Fiscal rules with discretion for an economic union | fr |
dc.type | Article | fr |
dc.contributor.affiliation | Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques | fr |
dcterms.abstract | The design of a fiscal rule involves a trade-off between committing governments to a fiscally responsible budget and giving governments the discretion to respond to shocks. What is the optimal degree of discretion for deficit-biased governments that are facing shocks to their fiscal needs? The tail of the distribution of shocks determines the optimal degree of discretion. If the tail is thin, an optimal rule features a cap on public spending enforced by off-equilibrium sanctions. If the tail is thick, an optimal rule grants more discretion than a cap could achieve at the cost of on-equilibrium sanctions. An optimal rule featuring on-equilibrium sanctions also features a threshold below which public spending is exempt from sanctions. The optimal exemption balances a loss of discipline on low levels of spending with an economy of sanctions on high levels of spending. These findings suggest avenues to reform the Stability and Growth Pact. | fr |
dcterms.language | eng | fr |
UdeM.ReferenceFournieParDeposant | Fiscal Rules with Discretion for an Economic Union | fr |
UdeM.VersionRioxx | Version publiée / Version of Record | fr |
oaire.citationTitle | Cahier de recherche | fr |
oaire.citationIssue | 2022-03 | fr |
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