During the past decade, the formulation of fiscal policy has been increasingly founded on medium-term considerations associated with public debt and economic efficiency. In this regard, this paper, and the ones by Olivier Blanchard and Edward Gramlich in the same Working Paper Series, considers...

The early 1980s were a time of large budget deficits and increasing ratios of government debt to GNP for many of the OECD countries (Table 1), prompting concerns that the fiscal policies which led to such outcomes were not only unwise, but also unsustainable. Assessing wisdom is not easy,...

This paper describes the methodology used by the IMF staff to calculate the structural budget balance, estimates of which are published regularly in the IMF’s World Economic Outlook. The structural budget balance is the government’s actual fiscal position purged of the estimated budgetary...