Von Hagen, J., &Wolff, G. B. (2006). What do deficits tell us about debt? Empirical evidence on creative accounting with fiscal rules in the EU. Journal of Banking &Finance, 30(12), 3259-3279.
Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behavior. develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this depends on the reputation cost ...