An Assessment of Fiscal Rules in the United Kingdom

July 1, 2001

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Format: Chicago

Michael Kell. An Assessment of Fiscal Rules in the United Kingdom, (USA: International Monetary Fund, 2001) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper assesses the United Kingdom's golden rule and debt rule against "ideal characteristics" of fiscal rules. It concludes that they are clearly defined; transparent in institutional arrangements and measurement; adequate to ensure sustainability; and strike a good balance between flexibility and enforceability. The rules could be strengthened by clarifying the benchmark embodied in the debt rule and the modalities of the "value for money" criterion for investment. Overall, the fiscal framework establishes the necessary preconditions for a credible fiscal policy, but the credibility of the rules could be undermined by the large gap between them and actual medium-term fiscal plans.

Subject: Capital spending, Current spending, Expenditure, Fiscal policy, Fiscal rules, Public debt, Public investment spending

Keywords: Capital spending, Current spending, Definition of sustainability, Fiscal rule, Fiscal rules, Fiscal sustainability, Government spending, Gross investment, Intergenerational equity, Investment rule, Monetary policy, Nominal interest rate, Transparency, U.K. case, U.K. government, U.K. rule, U.K. situation, Western Europe, WP

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2001/091
Stock No:

WPIEA0912001
ISBN:

9781451851519
ISSN:

1018-5941

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