Chilean Economy Benefits from Fiscal Policy Rules for Stability and Growth
The article examines how implementing a structural budget surplus rule in the Chilean economy affects various factors like credit worthiness, output stability, policy effectiveness, and welfare gains from economic growth. This rule helps stabilize public finances, prevent inflation, and manage income fluctuations without increasing debt. By maintaining a budget surplus, the government can support spending during economic downturns without borrowing more money. This approach can lead to better economic stability and growth over time.