Indicators of Fiscal Sustainability

January 1, 1991

Preview Citation

Format: Chicago

Jocelyn Horne. Indicators of Fiscal Sustainability, (USA: International Monetary Fund, 1991) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper assesses the usefulness of summary measures of fiscal sustainability for the purpose of multilateral surveillance. An overview of the main conceptual issues is first presented. Next, an assessment is made of the strengths and weaknesses of the summary measures in the context of their recent application to industrial countries by the OECD and the Fund. The measures are shown to highlight the inadequacy of using trends in public debt ratios to assess sustainability. However, the measures and their recent application are subject to a number of caveats, in particular in relation to their sensitivity to the discount rate, time paths of government expenditures and private sector behavior.

Subject: Expenditure, Financial services, Fiscal policy, Fiscal sustainability, Public debt, Real interest rates

Keywords: Budget constraint, Debt repudiation, Debt stabilization, Fiscal policy sustainability, Fiscal sustainability, GDP, Global, Government solvency, Present discounted value, Public debt-to-GDP ratio, Real interest rates, Stock ratio, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1991/005
Stock No:

WPIEA0051991
ISBN:

9781451842081
ISSN:

1018-5941

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