Taylor's Fiscal Rule: An Exit to the Stability and Growth Pact Dead-end?

Farvaque E., F. Huart and C. Vaneecloo (2006), “Taylor’s fiscal rule: An exit to the Growth and Stability Pact dead-end”, Acta Oeconomica, 56(3), 323-340.

Posted: 22 Apr 2020

See all articles by Etienne Farvaque

Etienne Farvaque

University of Lille I - Department of Economics and Management; Lille Economie & Management (LEM) UMR 9221

Florence Huart

Université de Lille, LEM - CNRS (UMR 9221)

Clément Vaneecloo

affiliation not provided to SSRN

Date Written: 2006

Abstract

This study applies Taylor's (2000) proposed fiscal rule to EU-15 countries. We show that such a simple, flexible and transparent fiscal rule, if applied to individual EMU countries, could improve the enforceability of the Stability and Growth Pact. This rule is used to compute the structural budget balance consistent with a total budget position in balance, given national specificities concerning automatic stabilisers and the output gap. It is thus designed for being consistent with both fiscal discipline and flexibility.

Keywords: fiscal policy rule, automatic stabilisers, EMU, Stability

JEL Classification: E62, E63, H62

Suggested Citation

Farvaque, Etienne and Farvaque, Etienne and Huart, Florence and Vaneecloo, Clément, Taylor's Fiscal Rule: An Exit to the Stability and Growth Pact Dead-end? (2006). Farvaque E., F. Huart and C. Vaneecloo (2006), “Taylor’s fiscal rule: An exit to the Growth and Stability Pact dead-end”, Acta Oeconomica, 56(3), 323-340., Available at SSRN: https://ssrn.com/abstract=3562432

Etienne Farvaque

Lille Economie & Management (LEM) UMR 9221 ( email )

Lille
France

University of Lille I - Department of Economics and Management ( email )

Villeneuve D'Ascq Cedex, 59655
France

Florence Huart (Contact Author)

Université de Lille, LEM - CNRS (UMR 9221) ( email )

Cité scientifique
Villeneuve d'Ascq Cedex, 59655
France
33 (0)3 20 33 59 98 (Phone)

HOME PAGE: http://florence-huart.univ-lille1.fr/

Clément Vaneecloo

affiliation not provided to SSRN

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