On the need for fiscal discipline in a Union
Author | : Joshua Aizenman |
Publisher | : |
Total Pages | : 23 |
Release | : 1994 |
Genre | : |
ISBN | : |
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Author | : Joshua Aizenman |
Publisher | : |
Total Pages | : 23 |
Release | : 1994 |
Genre | : |
ISBN | : |
Author | : Mr.Morris Goldstein |
Publisher | : International Monetary Fund |
Total Pages | : 40 |
Release | : 1991-09-01 |
Genre | : Business & Economics |
ISBN | : 1451851200 |
The concept of market-based fiscal discipline posits that a government which runs persistent, excessive fiscal deficits will face an increased cost of borrowing and eventually, a reduced availability of credit, and that these market actions will provide an incentive to correct irresponsible fiscal behavior. This paper presents new empirical evidence on market-based fiscal discipline by estimating the relationship between the cost of borrowing and fiscal policy behavior across U.S. states. We find that U.S. states which have followed more prudent fiscal policies are perceived by the market as having lower default risk and are therefore able to reap the benefit of lower borrowing costs.
Author | : Carsten Detken |
Publisher | : |
Total Pages | : 40 |
Release | : 2004 |
Genre | : |
ISBN | : |
Author | : Carsten Detken |
Publisher | : |
Total Pages | : 40 |
Release | : 2004 |
Genre | : |
ISBN | : |
Author | : Charles Wyplosz |
Publisher | : |
Total Pages | : 53 |
Release | : 2003 |
Genre | : |
ISBN | : |
Author | : Joshua Aizenman |
Publisher | : |
Total Pages | : 37 |
Release | : 2014 |
Genre | : Fiscal policy |
ISBN | : |
This paper reviews recent research dealing with fiscal discipline and revisit the issues of fiscal control in federal systems, focusing on selective case studies covering the 2000s, before and after the Global Financial Crisis (GFC). We start by contrasting the recent fiscal history of California to that of Greece, illustrating the different ways of dealing with fiscal deficiencies in a mature union, U.S., versus a young union, Eurozone. We continue with an overview of the fiscal developments in Brazil, illustrating the challenges facing federal systems in emerging markets, and possible ways to move forward in upgrading a country's fiscal institutions. We conclude with the fiscal history of Iceland before and after the financial crisis-a standalone small country, assessed favorably by rating agencies prior to the GFC, and now recovering from a deep financial crisis.
Author | : Céline Allard |
Publisher | : International Monetary Fund |
Total Pages | : 29 |
Release | : 2013-09-25 |
Genre | : Business & Economics |
ISBN | : 1484325184 |
This is on a highly topical issue and addresses a key policy issue for Europe—namely, reinforcing EMU institutional architecture along with the Banking Union. Some proposals have emerged in Europe, and it will be important to put out staff views on this issue. In that context, publication as an SDN is appropriate, given the high profile nature and relevance of the topic—much like the Banking Union paper done a few months ago.
Author | : Mr. Manmohan S. Kumar |
Publisher | : International Monetary Fund |
Total Pages | : 144 |
Release | : 2007-10-18 |
Genre | : Business & Economics |
ISBN | : 1451927339 |
Fiscal discipline is essential to improve and sustain economic performance, maintain macroeconomic stability, and reduce vulnerabilities. Discipline is especially important if countries, industrial as well as developing, are to successfully meet the challenges, and reap the benefits, of economic and financial globalization. Lack of fiscal discipline generally stems from the injudicious use of policy discretion. The benefits of discretion are seen in terms of the ability of policymakers to respond to unexpected shocks and in allowing elected political representatives to fulfill their mandates. But discretion can be misused, resulting in persistent deficits and procyclical policies, rising debt levels, and, over time, a loss in policy credibility. The authors first explore the role of discretion in fiscal policy, and the extent, consequences, and causes of procyclicality, particularly in good times. They then examine how a variety of institutional approaches—fiscal rules, fiscal responsibility laws, and fiscal agencies—can help improve fiscal discipline. While each of these approaches can play a useful role, the authors suggest that a strategy combining them is likely to be particularly beneficial. Although such a strategy requires political commitment and effective fiscal management, at the same time, the strategy itself can bolster political commitment by highlighting the restraints on government and raising the costs of failing to respect them.
Author | : K. Santhanam |
Publisher | : |
Total Pages | : 5 |
Release | : 1966 |
Genre | : |
ISBN | : |
Author | : Mr.Helge Berger |
Publisher | : International Monetary Fund |
Total Pages | : 63 |
Release | : 2018-02-20 |
Genre | : Business & Economics |
ISBN | : 1484344030 |
The paper makes an analytical contribution to the revived discussion about the euro area’s institutional setup. After significant progress during the euro crisis, the drive to complete Europe’s Economic and Monetary Union (EMU) had stalled, and the way forward will benefit from an in-depth look at the conceptual issues raised by the evolution and architecture of Europe, and the tradeoffs involved. A thorough look at the underlying economic issues suggests that in the long run, EMU will benefit from progressing along three mutually supporting tracks: introduce more fiscal risk sharing, helping to make the sovereign “no bailout” rule credible; complementary financial sector reforms to delink sovereigns and banks; and more effective rules to discourage moral hazard. This evolution would ensure that financial markets provide incentives for fiscal discipline. Introducing more fiscal union comes with myriad legal, technical, operational, and political problems, raising questions well beyond the remit of economics. But without decisive progress to foster fiscal risk sharing, EMU will continue to face existential risks.