Arbeitspapier
The German 'debt brake': A shining example for European fiscal policy?
Many observers consider the German 'debt brake' beyond criticism. In the current crisis, many European countries have difficulties refinancing their budgets, while the German treasury's funding conditions are most favourable. The 'fiscal compact's' call for the introduction of German-style 'debt brakes' in the constitutions of other countries in order to rebuild their credibility on financial markets therefore might seem reasonable. However, there are several reasons to doubt the underlying (macro-) economic reasoning. Two specific problems of the German debt brake are analysed in greater detail: Firstly, the German rule is neither simple nor transparent. The calculation of structural deficits is a complex matter highly sensitive to specification and therefore open to political manipulation. Secondly, the debt brake will ultimately have a pro-cyclical effect because of the way the commonly used cyclical adjustment method works. This will, as a result, destabilise the economy. The German debt brake can therefore hardly serve as a good example for other countries.
- Language
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Englisch
- Bibliographic citation
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Series: Working Paper ; No. 15/2012
- Classification
-
Wirtschaft
Crisis Management
Fiscal Policies and Behavior of Economic Agents: Other
National Government Expenditures and Related Policies: General
- Subject
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Germany
debt brake
Euro zone
Euro crisis
sovereign debt
Verschuldungsrestriktion
Finanzpolitik
Regelgebundene Politik
Kritik
Deutschland
Öffentliche Schulden
Wirtschaftskrise
Eurozone
- Event
-
Geistige Schöpfung
- (who)
-
Truger, Achim
Will, Henner
- Event
-
Veröffentlichung
- (who)
-
Hochschule für Wirtschaft und Recht Berlin, Institute for International Political Economy (IPE)
- (where)
-
Berlin
- (when)
-
2012
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Truger, Achim
- Will, Henner
- Hochschule für Wirtschaft und Recht Berlin, Institute for International Political Economy (IPE)
Time of origin
- 2012
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Die Ampel muss zum finanzpolitischen Pragmatismus zurückfinden!
Finanzpolitik: Zielgenauer entlasten!
Demystifying a shining example: German public finances under the debt brake
Is the debt brake behind Germany's successful fiscal consolidation?
Austerity, cyclical adjustment and the remaining leeway for expansionary fiscal policies within the current EU fiscal framework
Future fiscal and debt policies: Germany in the Context of the European Monetary Union
Reforming EU Fiscal Rules: More Leeway, Investment Orientation and Democratic Coordination
Reviving fiscal policy in Europe: towards an implementation of the golden rule of public investment
Austerity, cyclical adjustment and the remaining leeway for expansionary fiscal policies in the Euro area
The golden rule of public investment: A necessary and sufficient reform of the EU fiscal framework?
Fiscal policy and rebalancing in the Euro area: A critique of the German debt brake from a Post-Keynesian perspective
Fiscal Policy and Macroeconomic Performance in the Euro area - Lessons for the Future
Die Ampel muss zum finanzpolitischen Pragmatismus zurückfinden!
Finanzpolitik: Zielgenauer entlasten!
Demystifying a shining example: German public finances under the debt brake
Is the debt brake behind Germany's successful fiscal consolidation?
Austerity, cyclical adjustment and the remaining leeway for expansionary fiscal policies within the current EU fiscal framework
Future fiscal and debt policies: Germany in the Context of the European Monetary Union
Reforming EU Fiscal Rules: More Leeway, Investment Orientation and Democratic Coordination
Reviving fiscal policy in Europe: towards an implementation of the golden rule of public investment
Austerity, cyclical adjustment and the remaining leeway for expansionary fiscal policies in the Euro area
The golden rule of public investment: A necessary and sufficient reform of the EU fiscal framework?
Fiscal policy and rebalancing in the Euro area: A critique of the German debt brake from a Post-Keynesian perspective
Fiscal Policy and Macroeconomic Performance in the Euro area - Lessons for the Future
Die Ampel muss zum finanzpolitischen Pragmatismus zurückfinden!