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

Author/Editor:

Maren Brede ; Christian Henn

Publication Date:

April 6, 2018

Electronic Access:

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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.

Series:

Working Paper No. 18/78

Subject:

English

Publication Date:

April 6, 2018

ISBN/ISSN:

9781484349885/1018-5941

Stock No:

WPIEA2018078

Format:

Paper

Pages:

44

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