Post-Crisis Fiscal Rules: Stabilising Public Finance while Responding to Economic Aftershocks

This article discusses the economic crisis that has ravaged the budgets of many developed countries, and whether conditions have sufficiently stabilised to permit governments to introduce next-generation fiscal rules. The article examines a series of issues that may arise as governments re-engineer or introduce fiscal rules. Discussion of each issue begins with lessons from existing rules and concludes with observations on the design of new rules. The final section considers the role of budgeting in designing and implementing fiscal rules.