Fiscal Sustainability and Fiscal Soundness

Haizhou Huang () and Danyang Xie

Annals of Economics and Finance, 2008, vol. 9, issue 2, 239-251

Abstract: This paper tackles fiscal sustainability and fiscal soundness. In contrast to the existing literature, our analysis is in a general equilibrium framework. We obtain three results. First, we endogenize growth rate and interest rate, the two key rates for any study of fiscal sustainability; second, we illustrate that fiscal sustainability in general equilibrium should not be measured by a one-dimension indicator, e.g., debt-to-GDP ratio as in conventional studies, rather it is a line¡ªa fiscal sustainability frontier¡ªin two dimensions, namely, debt-to-GDP ratio and expenditure-to-GDP ratio; third, we obtain a novel and useful index of aggregate fiscal soundness.

Keywords: Fiscal sustainability; Sustainability frontier; Fiscal soundness (search for similar items in EconPapers)
JEL-codes: C61 E61 E62 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://aeconf.com/Articles/Nov2008/aef090203.pdf (application/pdf)
http://down.aefweb.net/AefArticles/aef090203.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2008:v:9:i:2:p:239-251

Access Statistics for this article

Annals of Economics and Finance is currently edited by Heng-fu Zou

More articles in Annals of Economics and Finance from Society for AEF Contact information at EDIRC.
Bibliographic data for series maintained by Qiang Gao ().