## Structural Balances and All That: Which Indicators to Use in Assessing Fiscal Policy

_IMF Working Papers, June 1, 2002_

## Source details

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## Bibliographic details
- Authors: Nigel A Chalk
- Published: June 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451852523.001

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### Summary
- Structural indicators of a country's fiscal position are regularly used as estimates of both discretionary changes in fiscal policy and the effect of fiscal policy on aggregate demand.
- The paper evaluates, from a theoretical standpoint and from empirical case studies, the usefulness of structural indicators in measuring:
  - the size of discretionary policy action, and
  - fiscal demand stimulus.
- The paper discusses measurement problems relating to structural balances and the use of the fiscal impulse as an alternative to structural balances.

### Major propositions examined
- Proposition 1:
  - The change in the primary structural balance provides a better indicator of discretionary fiscal policy than does the change in the primary balance.
- Proposition 2:
  - The change in the structural balance is a good indicator of the demand stimulus arising from changes in the fiscal position.

### Topics and concepts covered
- Expenditure
- Fiscal policy
- Fiscal stance
- Macro-fiscal analysis
- Potential output
- Production
- Keywords reflected in the paper:
  - aggregate demand
  - budget constraint
  - consumption good
  - consumption-savings decision
  - demand stimulus
  - fiscal policy measure
  - Fiscal stance
  - fiscal stimulus
  - impact of fiscal policy
  - imperfect competition
  - Macro-fiscal analysis
  - policy stance
  - potential GDP
  - Potential output
  - Structural balances
  - weighted budget balance
  - WP

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## Content in this bundle

- **Structural Balances and All That: Which Indicators to Use in Assessing Fiscal Policy - WP/02/101**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/structural-balances-and-all-that-which-indicators-to-use-in-assessing-fiscal-policy-15762_