Resumen de The economic importance of fiscal rules
The objective of this study is to investigate the e¤ect of the Stability and Growth Pact (SGP) for the cycle, the in�ation and the sustainability of the public �nances of the Euro Area. We contribute to the debate by estimating national and Euro-area structural VARS, and by using them in order to evaluate the consequences of the modi�cations to the SGP that have recently been proposed. The SVARs are identi�ed via a mix of short and long run restrictions that are relatively uncontroversial and compatible with most theoretical models of �scal policy; they also allow simultaneous modeling of �scal and monetary policy in order to avoid misspeci�cation.
The comparison among the di¤erent scenarios highlights the necessity of keeping both the preventive (peer pressure) and the restrictive arm of the pact, because the 3% threshold alone is a necessary but possibly insu¢cient condition to ensure the sustainability of public �nances.
