EconPapers    
Economics at your fingertips  
 

A balance‐sheet approach to fiscal sustainability

Eduardo Levy Yeyati and Federico Sturzenegger

Fiscal Studies, 2023, vol. 44, issue 1, 61-84

Abstract: This paper proposes an alternative methodology to assess fiscal sustainability. Our balance‐sheet approach (BSA) relies on estimating separately all of a government's assets and liabilities as opposed to focusing only on the burden of explicit liabilities. In our approach, assets are primarily the present discounted value of taxes, and liabilities include explicit liabilities but also the present discounted value of expenditures. Using the value of assets and liabilities, we compute the government's balance sheet, and therefore net worth. We then evaluate the response of net worth to growth, commodity prices or real exchange rate shocks. By computing a value for the government's net worth, our methodology allows an assessment of fiscal sustainability that is less reliant on the analyst's assumptions than traditional debt sustainability analysis (DSA).

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/1475-5890.12319

Related works:
Working Paper: A balance-sheet approach to fiscal sustainability (2021) Downloads
Working Paper: A Balance-Sheet Approach to Fiscal Sustainability (2021) Downloads
Working Paper: A Balance-Sheet Approach to Fiscal Sustainability (2007) Downloads
Working Paper: A Balance-Sheet Approach to Fiscal Sustainability (2007) Downloads
Working Paper: A Balance-Sheet Approach to Fiscal Sustainability (2007) Downloads
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:wly:fistud:v:44:y:2023:i:1:p:61-84

Access Statistics for this article

More articles in Fiscal Studies from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-03-25
Handle: RePEc:wly:fistud:v:44:y:2023:i:1:p:61-84