01792cas a2200253 a 4500 AALejournalIMF005711 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451872231 1018-5941 BD-DhAAL BD-DhAAL Kumhof, Michael. Simple, Implementable Fiscal Policy Rules / Michael Kumhof, Douglas Laxton. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (41 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper analyzes the scope for systematic rules-based fiscal activism in open economies. Relative to a balanced budget rule, automatic stabilizers significantly improve welfare. But they minimize fiscal instrument volatility rather than business cycle volatility. A more aggressively countercyclical tax revenue gap rule increases welfare gains by around 50 percent, with only modest increases in fiscal instrument volatility. For raw materials revenue gaps the government should let automatic stabilizers work. The best fiscal instruments are targeted transfers, consumption taxes and labor taxes, or, if it enters private utility, government spending. The welfare gains are significantly lower for more open economies. Mode of access: Internet Laxton, Douglas. IMF Working Papers; Working Paper ; No. 2009/076 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/076/001.2009.issue-076-en.xml IMF e-Library