Fiscal Governance after the Financial Crisis: A Review

Andrew Hughes Hallett

Research output: Contribution to journalJournal articleResearchpeer-review


Economists have traditionally used a simple rule that restricts primary deficits to less than a threshold given by the interest-growth rate differential and existing debt in order to judge fiscal sustainability. This rule derives from a single period application of the government budget constraint. It is not forward looking. In the equivalent dynamic rule, the primary surplus needs to match any expected, discounted increases in public spending, the net interest on existing debt, and preferences for extending debt relative to changing taxes.
Original languageEnglish
JournalEconomic Analysis and Policy
Pages (from-to)54-63
Number of pages10
Publication statusPublished - Dec 2019


  • Sustainable public debt
  • Primary deficit rules
  • Fiscal space

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