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Considering the IMF's Perspective on a "Sound Fiscal Policy"

Peter Heller

No 02/08, IMF Policy Discussion Papers from International Monetary Fund

Abstract: This paper provides a perspective on how the IMF assesses a “sound fiscal policy,” focusing principally on industrial and emerging market economies. It observes six central criteria: the short-term fiscal policy stance, with greater emphasis on automatic stabilizers than discretionary fiscal policy; relevance of medium- and sometimes long-term issues; fiscal sustainability; capacity for aggregate fiscal policy implementation (including political economy factors); structural content of fiscal policy (tax efficiency and public expenditure quality); and institutional, governance, and process issues associated with budget implementation and revenue collection. Greater emphasis could be placed on an adequate margin to deal with uncertain long-term challenges.

Keywords: Fiscal policy; IMF; International Monetary Fund, fiscal sustainability, fiscal position, fiscal policies, public debt, Fiscal Policies And Behavior Of Economic Agents, Macroeconomic - Aspects Of Public Finance, Macroeconomic Policy, And General Outlook, (search for similar items in EconPapers)
Pages: 28
Date: 2002-07-01
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