The Impact of Fiscal Rules on Public Finances in the Euro Area


This paper reviews the principles underlying fiscal rules and applies them to the current European Union. In the European Union, the supranational Stability and Growth Pact (SGP) should provide the necessary guidance to limit governmental borrowing by member states. In addition to the SGP, European countries are implementing various other fiscal rules that bind central, regional and local governments. We provide empirical estimates of the effect of fiscal rules on fiscal variables in the Euro area.

In CESifo DICE Report Journal for Institutional Comparisons