Rethinking fiscal rules Carranza Ugarte, Luis Díaz Saavedra, Julián Alberto Galdon Sanchez, Jose Enrique Fiscal policy Infrastructure Public spending Public deficit Debt limits The Covid 19 pandemic has caused both a decrease in tax revenues and an increase in public spending, forcing governments to increase fiscal deficits to unprecedented levels. Given these circumstances, it is foreseeable that fiscal rules will play a predominant role in the design of many countries’ recovery policies. We develop a general equilibrium, overlapping generations model for a small, open economy in order to study the impact of several fiscal rules upon welfare, public expenditures and growth. We calibrate the model to the Peruvian economy. In this economy, fiscal rules have been widely used and, unlike in other Latin American countries, they have been relatively successful. We find that fiscal rules will generate better results in terms of output if, in addition to maintaining control over the fiscal result, they also preserve public investment. We also find that the performance of economies that implement structural rules tends to be better than the performance of economies that implement rules based on realized budget balance. 2023-10-24T09:44:14Z 2023-10-24T09:44:14Z 2023-03-10 journal article L. Carranza-Ugarte et al. Rethinking fiscal rules. Journal of Comparative Economics 51 (2023) 833–857[https://doi.org/10.1016/j.jce.2023.02.005] https://hdl.handle.net/10481/85207 10.1016/j.jce.2023.02.005 eng http://creativecommons.org/licenses/by/4.0/ open access Atribución 4.0 Internacional Elsevier