Is the Cyclical Component of the Debt Brake Still Up to Its Task?
Abstract Debates around the German debt brake currently focus on the whether and how of constitutional reform. Yet, a key component of the debt brake — cyclical adjustment — is only specified in ordinary law. And upon closer inspection, it is precisely that part of the debt brake that is most in nee...
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Sciendo
2021-08-01
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| Series: | Wirtschaftsdienst |
| Online Access: | https://doi.org/10.1007/s10273-021-2984-4 |
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| author | Max Krahé Florian Schuster Philippa Sigl-Glöckner |
| author_facet | Max Krahé Florian Schuster Philippa Sigl-Glöckner |
| author_sort | Max Krahé |
| collection | DOAJ |
| description | Abstract Debates around the German debt brake currently focus on the whether and how of constitutional reform. Yet, a key component of the debt brake — cyclical adjustment — is only specified in ordinary law. And upon closer inspection, it is precisely that part of the debt brake that is most in need of reform: The cyclical component in its current form does not incorporate recent research findings, creates excessive space for discretionary decision making without accountability, and has an ambivalent impact on the sustainability of public finances in the long term. A reform of the cyclical component of the debt brake, which does not require changing the constitution, could therefore be a pragmatic step towards a more sustainable fiscal policy regime in Germany. |
| format | Article |
| id | doaj-art-2be54a10834247b6a14f650b548c2644 |
| institution | Kabale University |
| issn | 0043-6275 1613-978X |
| language | deu |
| publishDate | 2021-08-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Wirtschaftsdienst |
| spelling | doaj-art-2be54a10834247b6a14f650b548c26442025-02-02T02:37:13ZdeuSciendoWirtschaftsdienst0043-62751613-978X2021-08-01101862162810.1007/s10273-021-2984-4Is the Cyclical Component of the Debt Brake Still Up to Its Task?Max Krahé0Florian Schuster1Philippa Sigl-Glöckner2Institut für Sozioökonomie, Universität Duisburg-Essenc/o Innovation in Politics Institute, Dezernat Zukunftc/o Innovation in Politics Institute, Dezernat ZukunftAbstract Debates around the German debt brake currently focus on the whether and how of constitutional reform. Yet, a key component of the debt brake — cyclical adjustment — is only specified in ordinary law. And upon closer inspection, it is precisely that part of the debt brake that is most in need of reform: The cyclical component in its current form does not incorporate recent research findings, creates excessive space for discretionary decision making without accountability, and has an ambivalent impact on the sustainability of public finances in the long term. A reform of the cyclical component of the debt brake, which does not require changing the constitution, could therefore be a pragmatic step towards a more sustainable fiscal policy regime in Germany.https://doi.org/10.1007/s10273-021-2984-4 |
| spellingShingle | Max Krahé Florian Schuster Philippa Sigl-Glöckner Is the Cyclical Component of the Debt Brake Still Up to Its Task? Wirtschaftsdienst |
| title | Is the Cyclical Component of the Debt Brake Still Up to Its Task? |
| title_full | Is the Cyclical Component of the Debt Brake Still Up to Its Task? |
| title_fullStr | Is the Cyclical Component of the Debt Brake Still Up to Its Task? |
| title_full_unstemmed | Is the Cyclical Component of the Debt Brake Still Up to Its Task? |
| title_short | Is the Cyclical Component of the Debt Brake Still Up to Its Task? |
| title_sort | is the cyclical component of the debt brake still up to its task |
| url | https://doi.org/10.1007/s10273-021-2984-4 |
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