Logo
Munich Personal RePEc Archive

Fiscal stabilisation rule

Shahnazarian, Hovick (2022): Fiscal stabilisation rule.

This is the latest version of this item.

[img]
Preview
PDF
MPRA_paper_115074.pdf

Download (442kB) | Preview
[img]
Preview
PDF
MPRA_paper_115209.pdf

Download (453kB) | Preview

Abstract

This paper decomposes the fiscal balance into a cyclical and a structural component using an optimal fiscal stabilisation rule derived from a loss function where the government is assumed to keep structural balance close to the targeted surplus for fiscal balance while at the same time stabilising the GDP- and the inflation gap. A first-order Taylor expansion of fiscal balance is then used to further disaggregate the different components of fiscal balance. These practical policy rules can be used to calculate the magnitude of automatic stabilisers and the appropriate discretionary fiscal policies conditional on the state of the economy.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.