An Exploration of the Private Sector Response to Changes in Government Saving Across OECD Countries

Author/Editor:

Alun H. Thomas

Publication Date:

May 1, 2001

Electronic Access:

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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:

Several recent papers have examined the response of national saving to changes in fiscal policy. This paper uses knowledge about the intergenerational fiscal position of a country to determine whether this information helps to explain cross country differences in the nature of the response. Using OECD data the paper finds that in countries in intergenerational fiscal balance, the private sector completely offsets fiscal policy changes whereas in other countries the private sector offset is only partial. Moreover, in countries with large intergenerational fiscal imbalances, strong fiscal consolidation packages reduce the impact of changes in fiscal policy on national saving.

Series:

Working Paper No. 01/69

Subject:

English

Publication Date:

May 1, 2001

ISBN/ISSN:

9781451849066/1018-5941

Stock No:

WPIEA0692001

Format:

Paper

Pages:

26

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