Latin America's Fiscal Rules: Strengthening Sustainability but Lacking Shock Response.
The article discusses different types of fiscal rules in Latin America, focusing on long-term sustainability and stabilizing fiscal policy. It reviews how seven countries in the region have implemented these rules, with Chile and Colombia targeting cyclically adjusted indicators, while others focus on overall public balance or spending. The effectiveness of these rules varies, with some countries facing challenges in responding to economic shocks. The study suggests that a new generation of fiscal rules is needed to balance sustainability with flexibility in handling unexpected events.