IMF Working Papers

Finland’s Public Sector Balance Sheet: A Novel Approach to Analysis of Public Finance

By Maren Brede, Christian Henn

April 6, 2018

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Maren Brede, and Christian Henn. Finland’s Public Sector Balance Sheet: A Novel Approach to Analysis of Public Finance, (USA: International Monetary Fund, 2018) accessed September 20, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We construct a comprehensive public sector balance sheet for Finland from 2000 to 2016 by complementing general government statistics with data on public corporations and public pensions. We show that exposure to valuation changes in equity markets through asset holdings and increases in pension liabilities relative to GDP amplify crisis impacts on public finances. We expand the balance sheet by including present value estimates of future fiscal flows; this allows us to perform fiscal stress tests and policy experiments. These analyses suggest that Finland’s public finances will remain sound provided ongoing reform and consolidation efforts to address aging pressures are implemented as planned.

Subject: Economic sectors, Expenditure, Financial statements, Fiscal policy, Fiscal stance, Labor, Pension spending, Pensions, Public financial management (PFM), Public sector

Keywords: Asset stock, Balance sheet, Balance sheet approach, Debt, Debt liability, Debt measure, Debt Sustainability, Financial asset, Financial statements, Finland, Fiscal stance, GDP, Global, Government assets, Government debt reduction, Intertemporal balance sheet, Intertemporal Fiscal Balances, Net asset position, Non-financial assets, Pension liability, Pension spending, Pensions, Price fluctuation, Public sector, Public Sector Balance Sheet, Static balance sheet, WP

Publication Details

  • Pages:

    44

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/078

  • Stock No:

    WPIEA2018078

  • ISBN:

    9781484349885

  • ISSN:

    1018-5941