a column by Jongrim Ha, M. Ayhan Kose and Franziska Ohnsorge for VOX: CEPR’s Policy Portal
Emerging market and developing economies have achieved a remarkable decline in inflation since the early 1970s, supported by robust monetary policy frameworks, strengthening of global trade, financial integration, and the disruptions caused by the global crisis.
The column argues that a continuation of low and stable inflation in these countries is not guaranteed. If this wave of structural and policy-related factors loses momentum, elevated inflation could re-emerge. Policymakers may find that maintaining low inflation is as difficult as achieving it.
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Showing posts with label fiscal_rules. Show all posts
Showing posts with label fiscal_rules. Show all posts
Thursday, 18 April 2019
Friday, 21 September 2018
Refocusing the European fiscal framework
a column by Lars Feld, Christoph Schmidt, Isabel Schnabel and Volker Wieland for VOX: CEPR’s Policy Portal
Simplicity and transparency are essential to strengthen the effectiveness of fiscal rules and to ensure sustainable public finances; thus the German Council of Economic Experts has criticised recent reforms of the European fiscal framework for exacerbating their complexity.
This column proposes a redesign of the existing fiscal framework together with a drastic reduction in exception and escape clauses. The reformed framework employs a modified expenditure benchmark as an annual operational target. In addition, it implements the structural deficit rule as its medium-term target through a multi-purpose adjustment account, and a pre-specified debt ratio as its long-term limit achieved with a debt-correction factor.
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Simplicity and transparency are essential to strengthen the effectiveness of fiscal rules and to ensure sustainable public finances; thus the German Council of Economic Experts has criticised recent reforms of the European fiscal framework for exacerbating their complexity.
This column proposes a redesign of the existing fiscal framework together with a drastic reduction in exception and escape clauses. The reformed framework employs a modified expenditure benchmark as an annual operational target. In addition, it implements the structural deficit rule as its medium-term target through a multi-purpose adjustment account, and a pre-specified debt ratio as its long-term limit achieved with a debt-correction factor.
Continue reading
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