Long-Term Trends in Public Finances in the G-7 Economies

September 1, 2010

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Format: Chicago

Andrea Schaechter, and Carlo Cottarelli. Long-Term Trends in Public Finances in the G-7 Economies, (USA: International Monetary Fund, 2010) accessed November 9, 2024

Summary

Today’s record public debt levels in most advanced economies are not only a direct fall-out from the global crisis. Public debt had ratcheted up over many decades before, when it had been used, in most of the G-7 countries, as the ultimate shock absorber—rising in bad times but not declining much in good times. Alongside, primary spending increased, particularly during 1965–85, reflecting predominantly a surge in health care and pension spending. Looking ahead, advanced economies will face the formidable challenge of reducing debt ratios at a time when ageing-related spending, in particular often underestimated pressures from health care systems, will put additional pressure on public finances. Addressing these fiscal challenges will require growth-friendly structural reforms, a fiscal strategy involving gradual but steady fiscal adjustment, stronger fiscal institutions, expenditure and revenue reforms, and an appropriate degree of burden sharing across all stakeholders.

Subject: Corporate income tax, Expenditure, Health care spending, Public debt, Social security contributions, Taxes

Keywords: Baseline debt projection, Corporate income tax, Country, Country difference, Debt, Debt ratio, Europe, G-7, GDP, Global, Government debt ratios, Government expenditure, Health care spending, IMF staff estimate, Interest rate, Public debt debt ratio, Social security contributions, SPN

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Staff Position Note No. 2010/013
Stock No:

SPNEA2010013
ISBN:

9781455263325
ISSN:

2617-6742

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