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Stabilising expenditure rule in Poland – stochastic simulations for 2014-2040

Author

Listed:
  • Korniluk, Dominik

    (Ministry of Finance in Poland)

Abstract
The stabilising expenditure rule (SER) imposed on general government (GG) sector in Poland has been binding since 2014. According to this rule, about 90% of GG expenditure will grow in line with the real medium-term GDP, or slower if there is excessive debt or deficit, or balance does not meet the medium-term objective. It was shown in this paper how the SER affects the most important public finance indicators in the period 2014-2040. The consequences of the lowered debt thresholds in the SER's correction mechanism due to the pension reform were also presented. Finally, future fiscal policy conducted under the new rule was simulated and assessed.

Suggested Citation

  • Korniluk, Dominik, 2014. "Stabilising expenditure rule in Poland – stochastic simulations for 2014-2040," MF Working Papers 19, Ministry of Finance in Poland, revised 01 Sep 2014.
    • Handle: RePEc:ris:mfplwp:0019
    as

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    File URL: https://www.gov.pl/documents/1079560/1080340/MF_WP_No_18-2014.pdf/59e19b47-73e7-8009-9a16-aa264ae04c1c
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    References listed on IDEAS

    as
    1. Henning Bohn, 1998. "The Behavior of U. S. Public Debt and Deficits," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 949-963.
    2. Trehan, Bharat & Walsh, Carl E., 1988. "Common trends, the government's budget constraint, and revenue smoothing," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 425-444.
    3. Hamilton, James D & Flavin, Marjorie A, 1986. "On the Limitations of Government Borrowing: A Framework for EmpiricalTesting," American Economic Review, American Economic Association, vol. 76(4), pages 808-819, September.
    4. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    stabilising expenditure rule; stochastic simulations; debt thresholds; fiscal policy cyclica lity;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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