Comment on Lutz and Follette´s paper
Assessubg whether balanced budget rules are associated with differences in state fiscal behaviour, or to what extent states? debt levels are sound when assessing the efficacy of fiscal rules, it is quoted that:
n Correlations between usual ratings and debt levels suggest that tighter budget restrictions are associated with lower debt levels, for what one may assume that covenants are binding at the state level.
n States with strong rule states maintain larger balances than those with weak rule; in consequence, it can be deduced that the former exhibit stronger fiscal positions than the latter.
n Finally, despite constitutional rules are seen to be more effective in getting lower debt levels and smaller deficits, the cost in terms of an increase of states? budget outcome procyclicity should not be totally ignored.
Comment on Albuquerque´s paper
Comment on Albuquerque´s paper
Given the level of integration of the country?s economy to the world economy, it seems important to highlight Brazilian?s fiscal responses to 2007 and 2008 international crises; in particular, the performance of built-in flexibility and the response of active fiscal policies:
n In the first case, the effect of automatic stabilizers was not very important, reaching in the 2009 budget 0.27 p.p. of GDP due to tax losses from manufacturing and 0.17 p.p. of GDP due to more unemployment insurance payments.
n The discretionary fiscal policy did not either play an outstanding role as tax deductions only amounted to 0.8 p.p. of GDP whereas mandatory spending was raised by 1.21 p.p. of GDP. Nevertheless, this sufficed to explain why 2010 revenues could not meet expenditure requirements.
Given the level of integration of the country?s economy to the world economy, it seems important to highlight Brazilian?s fiscal responses to 2007 and 2008 international crises; in particular, the performance of built-in flexibility and the response of active fiscal policies:
n In the first case, the effect of automatic stabilizers was not very important, reaching in the 2009 budget 0.27 p.p. of GDP due to tax losses from manufacturing and 0.17 p.p. of GDP due to more unemployment insurance payments.
n The discretionary fiscal policy did not either play an outstanding role as tax deductions only amounted to 0.8 p.p. of GDP whereas mandatory spending was raised by 1.21 p.p. of GDP. Nevertheless, this sufficed to explain why 2010 revenues could not meet expenditure requirements.
Given the level of integration of the country?s economy to the world economy, it seems important to highlight Brazilian?s fiscal responses to 2007 and 2008 international crises; in particular, the performance of built-in flexibility and the response of active fiscal policies:
n In the first case, the effect of automatic stabilizers was not very important, reaching in the 2009 budget 0.27 p.p. of GDP due to tax losses from manufacturing and 0.17 p.p. of GDP due to more unemployment insurance payments.
n The discretionary fiscal policy did not either play an outstanding role as tax deductions only amounted to 0.8 p.p. of GDP whereas mandatory spending was raised by 1.21 p.p. of GDP. Nevertheless, this sufficed to explain why 2010 revenues could not meet expenditure requirements.
