Lars Calmfors: Institute for International Economic Studies, Stockholm University, Postal: Stockholm University, S-106 69 Stockholm, Sweden
Abstract: The Swedish Fiscal Policy Council, established in 2007, has small resources but a broad remit. In addition to monitoring the long-run sustainability of fiscal policy, the council evaluates the short-run fiscal stance from a cyclical perspective. The council also analyses long-run employment and growth developments. Another task is to evaluate the motives, explanations and research basis for government policies. There is no unique best set-up of a fiscal policy council. Instead, it has to be adapted to the special characteristics of each country. The set-up of the Swedish council appears consistent both with the preexisting institutional framework, with also other bodies making detailed budget evaluations and macroeconomic forecasts, and with a strong tradition of academic participation in the policy debate. The broad remit could lead to less focus on the fiscal watchdog role. On the other hand, the council plays a "supervisory" role in the general economic policy debate, helping to raise the standards of the discussion, which is a fundamental democratic objective.
36 pages, March 18, 2010
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