Professor Philip Lane:

Fiscal policy is a national-domestic responsibility. There are many countries involved and perhaps, at some point, they will change the legislation. Under current regulations it is scaled by GDP. Even if they can do nothing about it, domestically, whether it be the Irish Fiscal Advisory Council or the Oireachtas, when we think about fiscal policy, if we do not want to fool ourselves by using an inflated GDP number, we should be thinking about other scaling factors such as GNI*, even though it is a tough message. It will be a tough message in the sense that the true state of the public finances will look tougher when one uses GNI* compared to GDP.