Accumulating debt raises concerns about its implications for macroeconomic stability. This paper sheds light on the implications of high indebtedness for the macroeconomic volatility by identifying the main drivers of the evolution of debt in a set of countries. The country choice was based on...

This paper considers the case for adjusting measures of the cyclically-adjusted fiscal balance for exceptional movements in the terms of trade for those countries where production of commodities is a substantial share of output. For such countries exceptional movements in commodity prices, such...

The economic crisis in the early 1990s prompted action on reforming the Swedish welfare state and its institutions, including deregulation of a wide range of product markets. In that way, Sweden took early action compared to other OECD countries currently struggling with how to make public...

This paper provides estimates of the implicit fiscal assets as well as of the evolution over time of fiscal costs and revenues related to tax-favoured retirement saving regimes in 17 OECD countries, taking into account current and future contributions, asset accumulation and withdrawals, all of...

Since the crisis of 2001, an impressive package of fiscal consolidation and institutional reform has created a strong foundation for economic growth. As a result, GDP growth has been strong and stable, inflation has fallen, and the public debt burden has been significantly reduced. Yet the...

Measuring cyclically-adjusted budget balances for OECD countries An important tool in the analysis of fiscal policy is the distinction between structural and cyclical components of the budget balance. This paper describes work undertaken to re-estimate and re-specify the elasticities underlying...

This paper assesses to what extent some components of government budgets affected by the macroeconomic situation operate to smooth the business cycle in individual OECD countries. It is shown that these automatic fiscal stabilisers have generally reduced cyclical volatility in the 1990s....

Brazil's fiscal adjustment since the floating of the real in 1999 has been impressive, even in periods of lacklustre growth. This suggests a remarkable fiscal effort to ensure public debt sustainability. To better gauge the magnitude of this adjustment effort, this paper applies the methodology...

Frequent recourse to large one-off operations in a number of OECD countries has undermined the accuracy of cyclically adjusted fiscal balances as a measure of both the sustainability of public finance and the fiscal stance. This paper first provides detailed information on the nature and amount...

Monetary and fiscal policies face huge challenges: the banking sector has collapsed; the economy is in the midst of a deep recession; the exchange rate has plunged; capital flows have been frozen; inflation is elevated; public debt has risen; source of revenues have disappeared; social needs have...