Is the expenditure benchmark up standard? Procyclicality in the measurement of potential output and the future of the EU fiscal framework by Sebastian Barnes and Eddie Casey (2019).” Potential benefits of expenditure rules
Any fiscal variable could be used as the target, however, some arguments in favourof spending rule:
- Revisions to allowable growth rate in a given year likely lessthan revisions to output gap
- Spending more directly under government control: does not rely on estimated tax elasticity
- Link to multiannual expenditure ceilings
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