Fiscal rules, budget deficits and budget projections

Debt Level and Fiscal Rules in Iran According to Budget Structural Reform

Oil-exporting countries often escalate macroeconomic fluctuations by adopting cyclical fiscal policies. Empirical evidence shows that the main reason of instability in oil-exporting countries is the poor management of oil. In this study, after introducing a small open macroeconomic model with a dual managed floating exchange rate regime and estimating it using quarterly macroeconomic data of Ir...

Balanced Budget Rules and Fiscal Policy: Evidence from the States

The persistence of fiscal deficits in many industrial democracies has spawned a vast theoretical literature in political economy on why nations run budget deficits, along with a sharp policy debate concerning fiscal institutions that might reduce these deficits. The debate on fiscal institutions, such as proposed balanced budget amendments for the federal government, involves relatively little ...

Optimal Budget Deficits

Political Budget Cycles and Fiscal Decentralization∗

In this paper, we study a model à la Rogoff (1990) where politicians distort fiscal policy to signal their competency, but where fiscal policy can be centralized or decentralized. Our main focus is on the equilibrium probability that fiscal policy is distorted in any region, which we call the probability of a Political Budget Cycle (PBC). With centralization, there is the possibility of selecti...

Optimal Budget Deficit Rules

This paper discusses the problem of the optimal determination of budget deficit limits in cases where the fiscal authority wishes to keep the budget deficit close to a reference value. It is assumed that the fiscal authority minimizes the expected discounted value of squared deviations from the reference value. Lump-sum and proportional intervention costs are considered. This paper is also an e...