Targeting the Structural Balance

43 Pages Posted: 25 Apr 2011

See all articles by Laura dos Reis

Laura dos Reis

affiliation not provided to SSRN

Paolo Manasse

Department of Economics, University of Bologna

Ugo Panizza

Graduate Institute of International and Development Studies (IHEID) - Department of Economics; CEPR

Date Written: March 2007

Abstract

This paper discusses whether a country should conduct fiscal policy by targeting a structural (or cyclically adjusted) fiscal balance. The paper is divided into three sections. The first section discusses the concept of cyclically adjusted balance (CAB) and points out practical and conceptual problems related to the interpretation and the measurement of a CAB. The second section discusses the theoretical rationale for having a fiscal rule in general and a rule defined in terms of a cyclically adjusted balance in particular. The third section discusses conceptual and practical problems with adopting fiscal rules and rules that target the structural balance.

Suggested Citation

Reis, Laura dos and Manasse, Paolo and Panizza, Ugo, Targeting the Structural Balance (March 2007). IDB Working Paper No. 500, Available at SSRN: https://ssrn.com/abstract=1820073 or http://dx.doi.org/10.2139/ssrn.1820073

Laura dos Reis (Contact Author)

affiliation not provided to SSRN

No Address Available

Paolo Manasse

Department of Economics, University of Bologna ( email )

Pza Scaravilli 1
Bologna, Bologna 40100
Italy
+39051209 2616 (Phone)

HOME PAGE: http://www2.dse.unibo.it/manasse/index.htm

Ugo Panizza

Graduate Institute of International and Development Studies (IHEID) - Department of Economics ( email )

Geneva Avenue de la Paix 11A
Geneva, 1202
Switzerland

CEPR

London
United Kingdom

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