The debt brake recently introduced into the German constitution forces the German federal states (Länder) to run structurally balanced budgets form 2020 onwards. The study is preoccupied with the potential effects of the debt brakes on the budget of the federal state of Hessen in the transition period until 2020. Although there is substantial leeway as to the exact specification of technical details the results show that even under favourable conditions fiscal policy in Hessen would be forced into severe restriction. Under more unfavourable conditions the ability of the Hessian government to act may be called into question.
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