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The Role of Fiscal Policy Rules in the Postcrisis Period: Easing or Tightening?

  • ECONOMIC POLICY
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Studies on Russian Economic Development Aims and scope

Abstract—

The article considers the ways to adapt fiscal rules in the postpandemic period in the Republic of Armenia, taking into account the new challenges associated with the geopolitical situation. The effectiveness of existing fiscal rules during the crisis is assessed, taking into account their impact on economic recovery, fiscal sustainability, and overall economic well-being. Through a comprehensive analysis of different configurations of fiscal rules, the authors attempt to determine the balance between flexibility and discipline in fiscal policy in the postcrisis period. The study examines the trade-offs between easing fiscal rules to achieve short-term recovery growth goals and maintaining stricter rules to ensure long-term fiscal stability.

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Notes

  1. In more detail, the formula and its conclusions are presented in the IMF working paper [19].

  2. Strict rules in this case imply restrictions on the deficit-to-GDP ratio at about 3% of GDP, which corresponds to simple fiscal rules most often used in international practice.

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Funding

The study was supported by the RA Science Committee within the framework of scientific project no. 21T-5B254 “Policy for overcoming the consequences of the COVID-19 pandemic and war in the Republic of Armenia.”

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Authors and Affiliations

  1. Russian-Armenian University, Yerevan, Armenia

    G. A. Petrosyan, I. B. Petrosyan & E. G. Petrosyan

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  1. G. A. Petrosyan
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  2. I. B. Petrosyan
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  3. E. G. Petrosyan
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Correspondence to G. A. Petrosyan.

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Translated by I. Pertsovskaya

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Petrosyan, G.A., Petrosyan, I.B. & Petrosyan, E.G. The Role of Fiscal Policy Rules in the Postcrisis Period: Easing or Tightening?. Stud. Russ. Econ. Dev. 35, 180–189 (2024). https://doi.org/10.1134/S1075700724020126

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