Indicators of Fiscal Sustainability

Jocelyn Horne

No 1991/005, IMF Working Papers from International Monetary Fund

Abstract: This paper assesses the usefulness of summary measures of fiscal sustainability for the purpose of multilateral surveillance. An overview of the main conceptual issues is first presented. Next, an assessment is made of the strengths and weaknesses of the summary measures in the context of their recent application to industrial countries by the OECD and the Fund. The measures are shown to highlight the inadequacy of using trends in public debt ratios to assess sustainability. However, the measures and their recent application are subject to a number of caveats, in particular in relation to their sensitivity to the discount rate, time paths of government expenditures and private sector behavior.

Keywords: WP; GDP; government solvency; budget constraint; fiscal policy sustainability; public debt-to-GDP ratio; stock ratio; present discounted value; debt repudiation; debt stabilization; Fiscal sustainability; Real interest rates; Global (search for similar items in EconPapers)
Pages: 34
Date: 1991-01-01
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Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1991/005

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