Talk:Golden Rule (fiscal policy)

I have added the other rule.

If the governmen ceded power to set intrest rates to the bank of england then how will government borrowing rase intrest rates? I thought intrest rates delibrately went up to encorage banks to lend.

Cash accounting vs accrual accounting edit
The entry added for cash vs accrual accounting was not relevant to the topic.

The Golden Rule in fiscal policy terms does not relate in any way to the accounting treatment of expenditure. Rather, it deals with the distinction between consumption and investment expenditure. --DWR 20:40, 29 October 2007 (UTC)

Original research
This article doesn't have a single source which actually defines what the Golden Rule for fiscal policy is. Then it lists of various statues regarding how fiscal policy is to be conducted in various countries. Some of these might be relevant some might not. At best this is WP:SYNTHESIS.  Volunteer Marek  04:45, 21 December 2015 (UTC)

Dr. Creel's comment on this article
Dr. Creel has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"As far as I could understand subsections "Golden rule in (France, Germany, etc.)", I am afraid there is a mistake and misunderstanding. These sections are not referring to the Golden rule of public finance, related to public investment, but to the (German-style) golden rule of public finance which intends to limit drastically cyclically-adjusted (or structural) deficit. Rather than a (rather) progressive fiscal rule, the (German-style) golden rule is very conservative. To make it clearer, the "debt brake" of Germany does not permit the exemption of public investment from a deficit target, whereas the UK did actually implement a Golden rule of public finance which was intended to boost public investment and finance it with new debt issuances. Both rules are very different, indeed, and should not be mixed.

The article lacks a paragraph on the fact that some economists proposed that the European Union adopts a new fiscal rule like the golden (investment) rule, to replace the 3% of GDP deficit cap. These economists were Fitoussi and Creel (2002, Center for European Reform, London), Blanchard and Giavazzi (2003, CEPR) and, more recently, the proposal has been revived by Truger (2016, IMK Working Paper).

The Golden rule in the UK has been well analysed by W. Buiter in a paper published in Oxford Economic Papers (2001, Notes on 'A code for fiscal stability'). An evaluation was proposed by Creel, Monperrus-Veroni and Saraceno in Scottish Journal of Political Economy (2007).

As far as the "justification for the Golden Rule" is concerned, the "crowding-out" effect is not the main reason. There can be at least three justifications. First, some public investment might complement private investment or create an impulse to the rise in private investment. There is thus some crowding-in (not crowding-out): the creation of a road (a public investment) make an area more attractive and generates new private investments (the creation of a factory which can communicate with customers thanks to the road - very simplistic example!). Second, unlike some current expenditures which (should) benefit public services' customers/citizens in real time, public investment will produce effects only in the mid to long run. Financing public investment with debt means that costs are spread over the entire life of the investment and the capital is being repaid by the generations actually benefiting from the investment. Third, an impulse on public investment can boost demand in the short-run and boost supply in the long-run if investment is actually productive. Public investment thus helps to overcome a depression and to create new potentialities."

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

We believe Dr. Creel has expertise on the topic of this article, since he has published relevant scholarly research:


 * Reference : Jerome Creel & Paul Hubert & Francesco Saraceno,, 2013. "Assessing future sustainability of french public finances," Documents de Travail de l'OFCE 2013-11, Observatoire Francais des Conjonctures Economiques (OFCE).

ExpertIdeasBot (talk) 16:14, 11 July 2016 (UTC)

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