Pension Reform and the Fiscal Policy Stance

Author/Editor:

Philip R. Gerson ; George A Mackenzie ; Peter S. Heller ; Alfredo Cuevas

Publication Date:

December 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:

The increased budget deficit caused by the privatization of a public pension plan does not imply a relaxation of the stance of fiscal policy. The reform's impact on the fiscal stance and national saving depends primarily on its effect on the sum of explicit and implicit public debt and on the post-reform payroll tax and private system contribution rates. However, the precise impact of reform also depends on such influences as the relationship between the rates of interest on implicit and explicit public debt. There may be circumstances in which pension privatization, if not offset by fiscal consolidation, will loosen the fiscal stance.

Series:

Working Paper No. 01/214

Subject:

English

Publication Date:

December 1, 2001

ISBN/ISSN:

9781451874990/1018-5941

Stock No:

WPIEA2142001

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

16

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