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Author/Editor:
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Annett, Anthony
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Publication Date:
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October 01, 2007
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Electronic Access:
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Free Full text
(PDF file size is 367KB).
Use the free
Adobe Acrobat Reader
to view this PDF file
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
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Summary:
Expenditure in Iceland, especially related to the government wage bill, has tended to move in a procyclical manner, related to the fragmentation of political decision making. Iceland's elevated macroeconomic volatility reinforces these tendencies, as large booms unleash greater fiscal pressures as well as procyclical revenue elasticities that magnify these underlying strains. To improve its fiscal framework, Iceland could look to the experience of countries like Belgium and the Netherlands. In particular, it could adopt binding nominal expenditure rules, independent forecasts, and use representative committees to lay out medium-term targets across different levels of government.
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Series:
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Working Paper No. 07/235
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Subject(s):
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Fiscal policy | Iceland | Government expenditures | Political economy | Finland
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Author's Keyword(s):
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Fiscal policy | procyclicality | political economy |
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English
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Publication Date:
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October 01, 2007
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Format:
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Paper
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Stock No:
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WPIEA2007235
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Pages:
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25
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Price:
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US$18.00 )
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Please address any questions about this title to
publications@imf.org
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