Public Sector Balance Sheet Strength and the Macro Economy
IMF Working Papers, August 6, 2019
Source details
- Canonical URL
- Public Sector Balance Sheet Strength and the Macro Economy
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Bibliographic details
- Authors: Reza Yousefi
- Published: August 6, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513508955.001
Key concepts and scope
- Introduces concepts of public sector balance sheet (PSBS) strength, taking into account different aspects of what governments own in addition to what they owe.
- Develops measures of PSBS strength and investigates their macroeconomic implications.
Main empirical findings
- Financial markets, in their pricing of sovereign bonds, account for government assets and net worth in addition to their liabilities.
- Economies with stronger public sector balance sheets experience shallower recessions and recover faster in the aftermath of economic downturns.
Mechanism and interpretation
- The faster return to growth in countries with stronger balance sheets can be explained by the greater space for countercyclical fiscal policy in countries with stronger balance sheets.
Subject coverage and keywords
- Subjects: Bond yields, Financial institutions, Financial services, Financial statements, Public debt, Public financial management (PFM), Public sector, Sovereign bonds, Yield curve
- Keywords: balance sheet, balance sheet data, balance sheet indicator, balance sheet measure, balance sheet strength, balance sheet strength measure, balance sheet variable, Bond yields, debt, Financial statements, Fiscal policy, government balance sheets, Net financial worth, Net worth, Public sector balance sheet, Sovereign bonds, WP, Yield curve
Content in this bundle
- Working Paper