Long-term fiscal sustainability in advanced economies

Alan Auerbach

Governance Working Papers from East Asian Bureau of Economic Research

Abstract: This paper provides an evaluation of the long-term fiscal sustainability of advanced economies, based on current estimates of these economies’ current-policy fiscal trajectories. As will be quite evident, for many countries short-term fiscal measures, such as the debt-GDP ratio and the current budget deficit as a share of GDP, bear little relationship to the sustainability of policy. Some countries appear to be on relatively sustainable paths despite challenging short-run statistics, while for others benign short-term measures mask very large long-term problems. Of course, the future is uncertain while the present is known, so one may be tempted to discount negative long-term projections. But, based as they are on a demographic transition that is surely underway, one can discount particular estimates but not their general direction.

Keywords: Fiscal Sustainability; public debt; Fiscal Gap (search for similar items in EconPapers)
JEL-codes: H62 H63 H68 (search for similar items in EconPapers)
Date: 2015-04
New Economics Papers: this item is included in nep-pbe
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Related works:
Journal Article: Long-Term Fiscal Sustainability in Advanced Economies (2016)
Working Paper: Long-Term Fiscal Sustainability in Advanced Economies (2016)
Working Paper: Long-term fiscal sustainability in advanced economies (2015)
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