Download or read book Fiscal Rules in a Volatile World written by Carlos Garcia and published by International Monetary Fund. This book was released on 2011-03-01 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is widely agreed that a fiscal rule should boost discipline and credibility, reduce macroeconomic volatility, and be easily understood. To support such goals, a government may run structural surpluses and accumulate a precautionary cushion of assets on behalf of agents who do not enjoy access to capital markets. As an additional criterion, that level of assets should be bounded. We provide an example of a structural surplus rule that satisfies all such criteria. In our general equilibrium simulations, we show that such a rule benefits credit-constrained consumers but may hurt others.