Comment on Charles Wyplosz: Fiscal Policy Councils - Unlovable or Just Unloved?’, at Economic Council

Charles Wyplosz has written a very fine survey of the discussion around fiscal policy councils: the potential fiscal problems they should help to alleviate, various ways of setting up such councils and whether they can both work and be loved. I have developed my general views on fiscal policy councils else-where and I shall not repeat them here.1 Instead, I shall focus my comments on the newly established Swedish Fiscal Policy Council and how its construction is related to the general discussion about such councils. The existing academic proposals on fiscal policy councils can be classified into three main categories: • A hard option where such a council takes on a direct decision-making role regarding budget outcomes. • A soft version where such a council gives the government authori-tative recommendations on future policy. • An even softer version, according to which the government should be obliged to base its budget proposal on forecasts made by an in-dependent committee in order to avoid an optimism bias in forecasts which could be used to justify lax budgetary policy.2 The Swedish version of a fiscal policy council differs from earlier proposals in two respects. On the one hand, it is much softer than even the softest of these proposals, since the task is not to make ex ante recommendations but instead an ex post evaluation of past pol-icy. And the Swedish council will certainly not have any decision-making power except, of course, regarding its own work. But, on the other hand, the policy area to be covered is much broader than in the standard proposals