Fiscal Sustainability : A 21st Century Guide for the Perplexed

Author/Editor: Evan Tanner
Publication Date: April 22, 2013
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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
Summary: This paper critically reviews recent work regarding the sustainability of public debt. It argues that Debt Sustainability Analyses (DSAs) should be more than mere mechanical simulation exercises. Instead, a DSA should be linked to some objective regarding the distribution of fiscal burdens and distortions over time (in the tradition of Barro’s 1979 tax smoothing objective). The paper discusses objective functions that yield simple and transparent fiscal policy rules.
Series: Working Paper No. 13/89
Subject(s): Fiscal sustainability | Public debt | Fiscal policy | Debt sustainability analysis | Business cycles

Publication Date: April 22, 2013
ISBN/ISSN: 9781484381991/1018-5941 Format: Paper
Stock No: WPIEA2013089 Pages: 49
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