01793cas a2200241 a 4500 AALejournalIMF010096 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451971002 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. From Deficit Delusion to the Fiscal Balance Rule. Washington, D.C. : International Monetary Fund, 1989. 1 online resource (26 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 Although the deficit is a useful construct for Keynesian analyses of fiscal policy, the deficit appears to be a less useful measure of fiscal policy within all but a restricted class of intertemporal neoclassical models. This paper suggests that the nature of deficits in a simple certainty model with nondistortionary policies, and the in settings with uncertain policy, distortionary policy, and liquidity constraints is, to a large extent, arbitrary. It then posits a more appropriate description of fiscal policy for the class of models in question, and proposes the economically meaningful 'fiscal balance rule' as an alternative to the economically arbitrary 'balanced budget rule' as a means of assessing whether fiscal policy is intergenerationally tight or loose. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1989/050 Full text available on IMF http://elibrary.imf.org/view/journals/001/1989/050/001.1989.issue-050-en.xml IMF e-Library