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Do fiscal rules likely lead to fiscal adjustment, or do they encourage the use of ‘creative accounting’? This question is studied with a model in which fiscal rules are imposed on ‘measured’ fiscal variables, which can differ from ‘true’ variables because there is a margin for creative accounting. The probability of detecting creative accounting depends on its size and the transparency of the budget. The model studies the effects on fiscal policy of different rules, separating structural from cyclical effects, and examines how these effects depend on the underlying fiscal distortion and on the degree of transparency of the budget.

Budgeting --- Macroeconomics --- Public Finance --- Fiscal Policy --- National Budget --- Budget Systems --- National Deficit Surplus --- Debt --- Debt Management --- Sovereign Debt --- National Government Expenditures and Related Policies: General --- Budgeting & financial management --- Public finance & taxation --- Budget planning and preparation --- Fiscal policy --- Fiscal rules --- Government debt management --- Expenditure --- Public financial management (PFM) --- Budget --- Debts, Public --- Expenditures, Public --- Italy

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In the 1990s, transition countries underwent large adjustments to address fiscal imbalances. This paper examines whether the factors identified in the literature on advanced economies, the size and composition of adjustment, are important in transition economies. It finds that larger consolidations were more successful in addressing fiscal imbalances on a durable basis. Policies focusing on expenditure reductions were more successful than those relying on revenue increases. There is little evidence of expansionary fiscal contractions, but fiscal contractions did not have a significantly negative impact on growth either. Few fiscal stimuli succeeded in boosting growth.

Macroeconomics --- Public Finance --- Fiscal Policy --- Studies of Particular Policy Episodes --- National Deficit Surplus --- International Fiscal Issues --- International Public Goods --- National Government Expenditures and Related Policies: General --- Comparative or Joint Analysis of Fiscal and Monetary Policy --- Stabilization --- Treasury Policy --- Public finance & taxation --- Fiscal consolidation --- Fiscal stance --- Fiscal policy --- Expenditure --- Fiscal stabilization --- Expenditures, Public --- Mongolia

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This paper develops simple guidelines for fiscal policy in oil producing countries, focusing on three issues: intergenerational oil distribution, precautionary saving, and adjustment costs. The paper presents a framework to analyze how the revenue generated by an exhaustible source of wealth that belongs to the government should be distributed between current and future generations. This framework is used to show the strengths and limitations of existing answers, which motivates a new approach for dealing with this question. The paper derives simple, closed form approximations to the optimal level of government expenditure when an important part of government revenue is generated by an uncertain and exhaustible natural resource such as oil. Price uncertainty, budget uncertainty, and the (possibly asymmetric) costs of adjusting expenditure levels are considered.

Investments: Energy --- Macroeconomics --- Public Finance --- Fiscal Policy --- National Deficit Surplus --- Debt --- Debt Management --- Sovereign Debt --- Macroeconomics: Consumption --- Saving --- Wealth --- Aggregate Factor Income Distribution --- Energy: Demand and Supply --- Prices --- Energy: General --- National Government Expenditures and Related Policies: General --- Investment & securities --- Public finance & taxation --- Consumption --- Income --- Oil prices --- Oil --- Expenditure --- National accounts --- Commodities --- Economics --- Petroleum industry and trade --- Expenditures, Public --- Kuwait

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The fiscal position of the Eastern Caribbean Currency Union (ECCU) has deteriorated significantly in recent years, resulting in sharp increases in public debt. The sustainability of public debt is examined using the public sector budget constraint to derive the maximum public-debt-to-GDP ratio that can be sustained based on a country's projected steady-state primary balance, interest rate on public debt, and economic growth rate. In this context, government deficits and debt in several ECCU member countries appear unsustainable, posing a risk to the stability of the currency union. A critical issue facing member countries is to implement fiscal policies consistent with sustainable public finances and debt to underpin the currency union.

Exports and Imports --- Macroeconomics --- Public Finance --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- Fiscal Policy --- Studies of Particular Policy Episodes --- National Deficit Surplus --- Debt --- Debt Management --- Sovereign Debt --- Financial Aspects of Economic Integration --- Public finance & taxation --- International economics --- Public debt --- Fiscal stance --- Fiscal policy --- Monetary unions --- Government debt management --- Economic integration --- Public financial management (PFM) --- Debts, Public --- Antigua and Barbuda

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This paper studies the fiscal restructuring of the first half of the 1990s in the major industrial countries. It presents and calibrates a simple model of the labor market and integrates it into a multi-country macroeconomic model that takes into account the effects of distortionary taxes. It then uses the resulting framework to simulate the effects of recent and prospective changes in fiscal policies in the group of seven major industrial countries. The analysis suggests that in the long run the impact on output is likely to be positive in those countries that relied relatively more on expenditure cuts or indirect tax increases (such as Canada, France, Japan, and the United Kingdom), while the effect of the fiscal restructuring on output is estimated to be negative in those countries that relied primarily on labor and capital taxes (Germany, Italy, and the United States).

Macroeconomics --- Public Finance --- Taxation --- Fiscal Policy --- National Deficit Surplus --- Business Taxes and Subsidies --- Macroeconomics: Consumption --- Saving --- Wealth --- National Government Expenditures and Related Policies: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Taxation, Subsidies, and Revenue: General --- Public finance & taxation --- Welfare & benefit systems --- Consumption taxes --- Consumption --- Expenditure --- Labor taxes --- Revenue administration --- Taxes --- National accounts --- Spendings tax --- Economics --- Expenditures, Public --- Income tax --- Revenue --- United States