A balance-sheet approach to fiscal sustainability

Eduardo Levi Yeyati and Federico Sturzenegger
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Eduardo Levi Yeyati: Universidad Torcuato Di Tella/The Brookings Institution
Federico Sturzenegger: Universidad de San Andrés/Harvard Kennedy School
Authors registered in the RePEc Author Service: Eduardo Levy Yeyati

No 55, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: This paper proposes a new methodology to assess fiscal sustainability. Our approach relies on computing both government ´s assets and liabilities as opposed to focuting only on explicity liabilities. Assets are primarily the present discounted value of taxes, while liablities are primarily the present discounted value of expenditures in addition to explicit liabilities. By looking at the government ´s balance sheet we can compute the net worth of government, as well as evaluate it’s response to growth, commodity prices or real exchange rate shocks. We show that the implications for fiscal sustainability may be different from those obtained by focusing only on explicit liabilities as in the traditional approaches.

Pages: 44 pages
Date: 2021-04
New Economics Papers: this item is included in nep-acc and nep-mac
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Citations: View citations in EconPapers (1)

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https://drive.google.com/file/d/1nbamzv8lQdN0WUvf9-ZEsXPr_NMlf8ID/view (application/pdf)

Related works:
Journal Article: A balance‐sheet approach to fiscal sustainability (2023)
Working Paper: A Balance-Sheet Approach to Fiscal Sustainability (2021)
Working Paper: A Balance-Sheet Approach to Fiscal Sustainability (2007)
Working Paper: A Balance-Sheet Approach to Fiscal Sustainability (2007)
Working Paper: A Balance-Sheet Approach to Fiscal Sustainability (2007)
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