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The research catalogue is an archive of ESRC-funded grants and outputs. Links, files and other content will no longer be maintained or updated after April 2014.

New Directions in Monetary and Fiscal Policy Analysis at the Macroeconomic Level

Grant reference: RES-062-23-1436

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Journal article details

What should fiscal councils do?
Fiscal watchdogs, so-called fiscal councils, have been proposed as a method to counter deficit bias of fiscal policy. The paper analyses theoretically what role fiscal councils could play and surveys empirically the activities of existing councils. Case studies of the Swedish Fiscal Policy Council and the UK Office for Budget Responsibility are done. It is concluded that fiscal councils should be advisory, rather than decision-making, and work as complements, rather than substitutes, to fiscal rules. Although no panacea, fiscal councils could play a useful role by at the same time strengthening fiscal discipline and allowing rules-based fiscal policy to be more flexible. A key issue is their political fragility and how their long-run viability should be secured. Three ways of guaranteeing their independence are suggested: (1) reputation-building; (2) formal national rules; and (3) international monitoring.

Primary contributor

Author Lars Calmfors

Additional contributors

Co-author Simon Wren-Lewis

Additional details

Blackwell Publishing
01 October 2011
Economic policy

Cite this outcome


Calmfors, Lars and Wren-Lewis, Simon (2011) What should fiscal councils do?. Economic policy. 26 (68), pp. 649-695 Oxford: Blackwell Publishing.


Calmfors Lars and Wren-Lewis Simon. What should fiscal councils do?. Economic policy 2011; 26 (68): 649-695.