Long-Term Trends in Public Finances in the G-7 Economies

 
Author/Editor: Schaechter, Andrea ; Cottarelli, Carlo
 
Publication Date: September 01, 2010
 
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Summary: Today’s record public debt levels in most advanced economies are not only a direct fall-out from the global crisis. Public debt had ratcheted up over many decades before, when it had been used, in most of the G-7 countries, as the ultimate shock absorber—rising in bad times but not declining much in good times. Alongside, primary spending increased, particularly during 1965–85, reflecting predominantly a surge in health care and pension spending. Looking ahead, advanced economies will face the formidable challenge of reducing debt ratios at a time when ageing-related spending, in particular often underestimated pressures from health care systems, will put additional pressure on public finances. Addressing these fiscal challenges will require growth-friendly structural reforms, a fiscal strategy involving gradual but steady fiscal adjustment, stronger fiscal institutions, expenditure and revenue reforms, and an appropriate degree of burden sharing across all stakeholders.
 
Series: Staff Position Note No. 2010/13
Frequency: Monthly
Subject(s): Public debt | Fiscal consolidation | Aging | Developed countries | Global Financial Crisis 2008-2009 | Government expenditures | Group of seven | Public finance | Tax revenues | Taxation

Author's Keyword(s): Fiscal policy | public debt | size government | fiscal consolidation | age-related spending | financial crisis
 
English
Publication Date: September 01, 2010
ISBN/ISSN: 9781455263325 Format: Paper
Stock No: SPNEA2010013 Pages: 24
Price:
Free
 
 
English
Publication Date: September 01, 2010
ISBN/ISSN: 978-1-61635-037-6 / 2072-3202 Format: A web quality merged PDF
Stock No: SPNET2010013 Pages: 23
Price:
Free
 
 
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