A toolkit for Assessing Fiscal Vulnerabilities and Risks in Advanced Economies

Author/Editor:

Elif C Arbatli Saxegaard ; Emre Alper ; Jiri Jonas ; Anke Weber ; Marc Gerard ; Tidiane Kinda ; Giovanni Callegari ; Anna Shabunina ; Andrea Schaechter ; Carlos Caceres

Publication Date:

January 1, 2012

Electronic Access:

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Summary:

This paper presents a range of tools and indicators for analyzing fiscal vulnerabilities and risks for advanced economies. The analysis covers key short-, medium- and long-term dimensions. Short-term pressures are captured by assessing (i) gross funding needs, (ii) market perceptions of default risk, and (iii) stress dependence among sovereigns. Medium- and long-term pressures are summarized by (iv) medium- and long-term budgetary adjustment needs, (v) susceptibility of debt projections to growth and interest rate shocks, and (vi) stochastic risks to medium-term debt dynamics. Aiming to cover a wide range of advanced economies and minimize data lags, has also influenced the selection of empirical methods. Due to these features, they can, for example, help inform the joint IMF-FSB Early Warning Exercise (EWE) on the fiscal dimensions of economic risks.

Series:

Working Paper No. 2012/011

Subject:

Credit default swap Debt sustainability analysis External debt Fiscal policy Fiscal risks Fiscal stance Money Public debt Public financial management (PFM)

Frequency:

Monthly

English

Publication Date:

January 1, 2012

ISBN/ISSN:

9781463931162/1018-5941

Stock No:

WPIEA2012011

Pages:

29

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