Theoretical foundations, properties and interpretation of the budget gap indicators

Теоретические основы, свойства и интерпретация индикаторов бюджетного разрыва

Goryunov, Yevgeniy (Горюнов, Евгений) ()
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Goryunov, Yevgeniy (Горюнов, Евгений): Gaidar Institute for Economic Policy

Ekonomicheskaya Politika / Economic Policy, 2016, vol. 2, 112—132

Abstract: Analysis of the sustainability of public finances requires the use of quantitative indicators by which to assess the possible risks of the budget crisis. The article deals with a special class of such indicators - indicators of the budget gap. Budget gap reflects the long-term budgetary imbalances, and a methodology for assessing fiscal sustainability with the use of this index is based on a comparison of the sum of the current size of the debt and the present value of expected future budget expenditure on the one hand, and the present value of future revenues - on the other. The article gives a theoretical justification of the budget gap as an indicator of fiscal sustainability, we discuss some of its properties, and especially the interpretation of its values. An illustrative example based on calculations carried out for the Russian budget.

Keywords: fiscal policy; fiscal stability; public debt (search for similar items in EconPapers)
JEL-codes: E62 H60 H62 H63 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:rnp:ecopol:ep1623

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