The macroeconomic effects of fiscal rules in the US states

• 成果类型: Article
• 署名作者: Fatás, A; Mihov, I
• 署名单位: INSEAD Business School
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2005.02.005
• 发表日期: 2006
• 页码: 101-117
• 关键词: Fiscal policy; business cycles; fiscal rules

摘要

Fiscal policy restrictions are often criticized for limiting the ability of governments to react to business cycle fluctuations and, consequently, the adoption of quantitative restrictions is viewed as inevitably leading to increased macroeconomic volatility. In this paper, we use data from 48 US states to investigate how budget rules affect fiscal policy outcomes. Our key findings are that (1) strict budgetary restrictions lead to lower policy volatility (i.e. less aggressive use of discretion in conducting fiscal policy) and (2) fiscal restrictions reduce the responsiveness of fiscal policy to Output shocks. These two results Should have opposite effects on output volatility. While less discretion should reduce volatility, less responsiveness of fiscal policy might amplify business cycles. We provide empirical support for the first effect: restrictions, by reducing discretion in fiscal policy, can reduce macroeconomic volatility. (c) 2005 Elsevier B.V. All rights reserved.