IDEAS home Printed from https://ideas.repec.org/a/cup/nierev/v264y2023ip59-74_3.html
   My bibliography  Save this article

The Macroeconomic Effects Of Re-Applying The Eu Fiscal Rules: Returning To The Status Quo Ante Or Moving To Expenditure Rules?

Author

Listed:
  • Paetz, Christoph
  • Watzka, Sebastian

Abstract

Against the background of the European Commission’s reform plans of the Stability and Growth Pact, this paper uses NiGEM to simulate the macroeconomic implications of re-applying the fiscal rules in 2024. Next to returning to the unreformed rules, the most prominent options include an expenditure rule. Our results indicate that re-applying the unreformed rules leads to severe cuts in public spending. An expenditure rule would, however, not necessarily alleviate the fiscal adjustment burden. Instead, our simulations show that great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way.

Suggested Citation

  • Paetz, Christoph & Watzka, Sebastian, 2023. "The Macroeconomic Effects Of Re-Applying The Eu Fiscal Rules: Returning To The Status Quo Ante Or Moving To Expenditure Rules?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 264, pages 59-74, May.
    • Handle: RePEc:cup:nierev:v:264:y:2023:i::p:59-74_3
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0027950123000169/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:nierev:v:264:y:2023:i::p:59-74_3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://edirc.repec.org/data/niesruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.