Fiscal Transparency and the Performance of Government Financial Assets
IMF Working Papers, January 22, 2015
Source details
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- Fiscal Transparency and the Performance of Government Financial Assets
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Bibliographic details
- Authors: Mike Seiferling, Shamsuddin Tareq
- Published: January 22, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498353953.001
Overview
- Authors: Mike Seiferling, Shamsuddin Tareq
- Publication: IMF Working Papers, Working Paper No. 2015/009
- Date: January 22, 2015
- Pages: 25
- Volume: 2015
- Issue: 009
- DOI: https://doi.org/10.5089/9781498353953.001
- Stock No: WPIEA2015009
- ISBN: 9781498353953
- ISSN: 1018-5941
Research question and purpose
- Examine stock-flow residuals (stock-flow adjustments) and their relationship with fiscal transparency.
- Provide a more detailed exposition of stock-flow residuals that accounts for financial assets and valuation changes.
- Highlight government acquisition of equities and investment fund shares and assess their performance in secondary markets.
- Investigate whether government equity portfolio performance correlates with fiscal transparency.
Key findings
- Stock-flow adjustments conventionally measured as the difference between changes in gross debt and deficits do not capture the role of financial assets and valuation changes and therefore do not correctly predict fiscal transparency.
- The performance of government equity portfolios correlates with fiscal transparency.
- Fully transparent governments are expected to generate between 6 and 8 percent higher returns on their equity portfolios than others.
Analytical focus and terms preserved
- Stock-flow adjustments (stock-flow residuals)
- Changes in gross debt and deficits
- Financial assets, valuation changes, holding gains on government financial assets
- Government acquisition of equities and investment fund shares
- Government portfolios of equities and investment fund shares
- General government financial asset volume change density
- Equity portfolio, government equities portfolio, net acquisition
Implications and suggested directions for research
- The performance of government financial assets (especially equity portfolios) may be a promising area for future research into fiscal transparency and stock-flow residuals.
- Measures of fiscal transparency and unexplained fiscal discrepancies should account for financial assets and valuation changes to improve explanatory power.
Subjects and keywords
- Subjects: Financial institutions; Financial markets; Financial statements; Fiscal transparency; Public financial management (PFM); Securities; Stock markets; Stocks
- Keywords: equity portfolio, Financial statements, fiscal transparency, General government financial asset volume change density, government equities portfolio, government financial assets, government portfolios of equities and investment fund shares, gross debt, holding gains on government financial assets, net acquisition, public finance, Securities, Stock markets, stock-flow adjustments, Stocks, WP
Source: IMF Working Paper "Fiscal Transparency and the Performance of Government Financial Assets", Mike Seiferling and Shamsuddin Tareq, January 22, 2015.