Fiscal rules in a volatile world: A welfare-based approach

It is widely agreed that a fiscal rule should boost discipline and credibility. A rule should also reduce macroeconomic volatility and be easily understood. Toward such ends,a government may run structural surpluses. In so doing,the government accumulates a precautionary cushion of assets on behalf of agents who do not enjoy access to capital markets. As an additional criterion,that level of assets should be bounded. We provide an example of a structural surplus rule that satisfies all such criteria. In our general equilibrium simulations,we show that such a rule benefits credit-constrained consumers but may hurt others. (C) 2011 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

Información de Publicación

Autores:

Carlos García

Institución: Universidad Alberto Hurtado
Facultad: Economía y Negocios
Unidad: Economía y Negocios

Jorge Restrepo

Unidad: Banco Central de Chile

Evan Tanner

Unidad: Fondo Monetario Internacional

Revista:

Journal of Policy Modeling

Año:

2011

Mes:

Julio

Volumen:

XXXIII

Número:

4

Páginas:

649-676

Url de Publicación:

https://www.imf.org/external/pubs/cat/longres.aspx?sk=24704.0.