The Impact of the Expenditure Rule on the Type of Fiscal Policy in Poland

Anna Moździerz

Abstract


Theoretical background: Presentation of Polish experiences with the introduction of the expenditure rule into the Polish law under the influence of EU regulations.

Purpose of the article: Demonstration that the modification of the expenditure rule carried out in 2015 resulted in the loss of its stabilising nature, which was supposed to be its main feature.

Research methods: The changes in the fiscal policy stance in 2013–2018 were identified on the basis of annual changes in the ratio of cyclically-adjusted primary balance to output gap.

Main findings: The analyses carried out in the paper showed that the expenditure rule in its original shape was conducive to mitigation of economic fluctuations. After the reduction of the restrictiveness of the expenditure rule in 2015, consisting in replacing the inflation target with medium-term inflation target, it no longer played a stabilising role. The conclusion of the article is that well-constructed numerical fiscal rules may be an important instrument for maintaining control over the state of public finances, but experiences with the expenditure rule in Poland provide many arguments to opponents of the application of numerical rules in fiscal policy.


Keywords


fiscal rule; expenditure rule; fiscal policy

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DOI: http://dx.doi.org/10.17951/h.2019.53.4.115-127
Date of publication: 2019-12-31 08:37:24
Date of submission: 2019-03-16 11:57:40


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