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Structural Budget Balance

Tuomo Virkola

No 11, ETLA Reports from The Research Institute of the Finnish Economy

Abstract: Abstract Euro Area member states have agreed to introduce a structural budget balance target to their national legislation (Treaty on Stability, Coordination and Governance). However, there exists no commonly agreed methodology to calculate this macroeconomic indicator. This report presents the conceptual framework underlying the calculation of structural fiscal balances as suggested by different international organizations such as the European Commission and the IMF. We emphasize that the methodology indeed affects both the quantitative estimates and the interpretation of the indicator for policy analysis. In addition we discuss some of the possible limitations of the indicator within real-time macroeconomic surveillance.

Keywords: Cyclically-adjusted budget balance; Structural balance; Fiscal policy; Macroeconomic surveillance (search for similar items in EconPapers)
JEL-codes: E32 E62 H60 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2013-05-14
New Economics Papers: this item is included in nep-eec
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Citations: View citations in EconPapers (1)

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