FISCAL SPENDING RULE AS AN ALTERNATIVE FOR FISCAL SUSTAINABILITY IN ECUADOR

Abstract

The article analyzes a spending rule that incorporates elements of aversion that the formulators of fiscal policy have, an important analysis for the Ecuadorian case, it is proposed to reduce the procyclical bias and have a link with sustainability from the introduction of the brake of the debt, additionally, an element is included to protect the non-permanent expense. In the results, the spending rule stabilizes public spending as a percentage of GDP, mentioning that the veracity depends on thedynamismof the initialassumptions and the decision of the authority. Finally, investment protection depends on the optimal levels of non-permanent spending in relation to total spending according to the country's development needs.