Fiscal Rules as The Foundation of Fiscal Responsibility and Public Finance Sustainability
DOI:
https://doi.org/10.55707/eb.v12i2.151Keywords:
fiscal rules, fiscal policy, public finances, fiscal responsibility, public debtAbstract
Fiscal rules are a key mechanism for ensuring fiscal responsibility and the sustainability of public finances. Their purpose is to limit public spending, control public debt, and reduce the procyclicality of fiscal policy, thereby contributing to macroeconomic stability. This article analyses different types of fiscal rules, their role in stabilizing public finances, and their impact on public debt. Empirical research shows that countries with fiscal rules achieve better budgetary outcomes and lower borrowing costs, but their effectiveness depends on the institutional framework and the level of political discipline. The implementation of fiscal rules is closely linked to the role of fiscal institutions, such as independent fiscal councils, which monitor compliance, assess budgetary forecasts, and advise governments on fiscal policy. Future research should evaluate the long-term effects of fiscal rules and the reform of the EU fiscal framework.
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