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Author: Hua Chai Publisher: International Monetary Fund ISBN: Category : Languages : en Pages : 30
Book Description
This paper proposes anchoring medium- to long-term fiscal policy in a Public Sector Net Worth (PSNW) target. Such a target widens the scope of fiscal policy to include public sector assets, in addition to liabilities—the focus of debt-based rules. A PSNW target is directly relevant to ongoing policy debates on green fiscal rules and more generally, the reform of fiscal frameworks (such as the Euro Area’s) to allow for public investment in a high debt environment. Modeling a small open economy with public investment and endogenous growth, we show that, compared to debt-based anchors, a PSNW anchor is more conducive to public investment and economic growth, while providing for sensible policy reactions to changes in long-term interest rates. The net worth anchor also precludes unsustainable debt dynamics. Simulated transition dynamics show that replacing a debt anchor with a net worth anchor does not necessarily lead to higher debt-to-GDP ratios. In addition to the merits of a net worth anchor, the paper also discusses some operational challenges.
Author: Hua Chai Publisher: International Monetary Fund ISBN: Category : Languages : en Pages : 30
Book Description
This paper proposes anchoring medium- to long-term fiscal policy in a Public Sector Net Worth (PSNW) target. Such a target widens the scope of fiscal policy to include public sector assets, in addition to liabilities—the focus of debt-based rules. A PSNW target is directly relevant to ongoing policy debates on green fiscal rules and more generally, the reform of fiscal frameworks (such as the Euro Area’s) to allow for public investment in a high debt environment. Modeling a small open economy with public investment and endogenous growth, we show that, compared to debt-based anchors, a PSNW anchor is more conducive to public investment and economic growth, while providing for sensible policy reactions to changes in long-term interest rates. The net worth anchor also precludes unsustainable debt dynamics. Simulated transition dynamics show that replacing a debt anchor with a net worth anchor does not necessarily lead to higher debt-to-GDP ratios. In addition to the merits of a net worth anchor, the paper also discusses some operational challenges.
Author: M. Ayhan Kose Publisher: World Bank Publications ISBN: 1464815453 Category : Business & Economics Languages : en Pages : 403
Book Description
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
Author: S. Ali Abbas Publisher: Oxford University Press ISBN: 0192591398 Category : Business & Economics Languages : en Pages : 455
Book Description
The last time global sovereign debt reached the level seen today was at the end of the Second World War, and this shaped a generation of economic policymaking. International institutions were transformed, country policies were often draconian and distortive, and many crises ensued. By the early 1970s, when debt fell back to pre-war levels, the world was radically different. It is likely that changes of a similar magnitude -for better and for worse - will play out over coming decades. Sovereign Debt: A Guide for Economists and Practitioners is an attempt to build some structure around the issues of sovereign debt to help guide economists, practitioners and policymakers through this complicated, but not intractable, subject. Sovereign Debt brings together some of the world's leading researchers and specialists in sovereign debt to cover a range of sub-disciplines within this vast topic. It explores debt management with debt sustainability; debt reduction policies with crisis prevention policies; and the history with the conjuncture. It is a foundation text for all those interested in sovereign debt, with a particular focus real world examples and issues.
Author: International Monetary Fund Publisher: International Monetary Fund ISBN: 1513584146 Category : Business & Economics Languages : en Pages : 114
Book Description
Chapter 1 argues that fiscal policy should remain nimble and strengthen its medium-term frameworks, as countries face highly uncertain and differentiated prospects. Vaccination has saved lives and is helping fuel a nascent recovery, but risks are elevated amidst new virus variants, high debt, and poverty. In advanced economies, the shift in fiscal support toward medium-term packages to “build back better” will have overall positive effects globally. Emerging markets and low-income developing countries face a more challenging outlook, with permanent economic scarring and revenue losses. They need international support to increase vaccine availability and financing to achieve the Sustainable Development Goals. Many countries find themselves in a situation where fiscal support is still invaluable to protect lives and livelihoods. At the same time, governments are also facing questions on their elevated debt and gross financing needs. Chapter 2 provides countries with guidance on how they can both avoid withdrawing fiscal support too early, and yet signal to the public that their debt levels are sustainable in the long run. To commit to future deficit reduction, governments have several instruments, including undertaking structural fiscal reforms (such as pension reform or subsidies reform), pre-legislating changes to taxes or spending, committing to fiscal rules that lead to deficit reduction in the future. Countries that follow debt rules, for instance, manage to reduce debt faster that other countries, although fiscal rules should also provide enough flexibility to spend in times of need. Overall, governments that commit to sound public finances and that achieve high levels of fiscal transparency reap meaningful benefits: their budgets are more credible, their announcements are better perceived by the media, and they pay lower interest rates on their debt.
Author: Luc Eyraud Publisher: International Monetary Fund ISBN: 1484350936 Category : Business & Economics Languages : en Pages : 132
Book Description
Fiscal rule frameworks have evolved significantly in response to the global financial crisis. Many countries have reformed their fiscal rules or introduced new ones with a view to enhancing the credibility of fiscal policy and providing a medium-term anchor. Enforcement and monitoring mechanisms have also been upgraded. However, these innovations have made the systems of rules more complicated to operate, while compliance has not improved. The SDN takes stock of past experiences, reviews recent reforms, and presents new research on the effectiveness of rules. It also proposes guiding principles for future reforms to strike a better balance between simplicity, flexibility, and enforceability. Read the blog
Author: International Monetary Fund. Western Hemisphere Dept. Publisher: International Monetary Fund ISBN: 1484384016 Category : Business & Economics Languages : en Pages : 73
Author: International Monetary Fund. Monetary and Capital Markets Department Publisher: International Monetary Fund ISBN: 1616352477 Category : Business & Economics Languages : en Pages : 94
Book Description
The April 2012 Global Financial Stability Report assesses changes in risks to financial stability over the past six months, focusing on sovereign vulnerabilities, risks stemming from private sector deleveraging, and assessing the continued resilience of emerging markets. The report probes the implications of recent reforms in the financial system for market perception of safe assets, and investigates the growing public and private costs of increased longevity risk from aging populations.
Author: Mr. Luc Eyraud Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 68
Book Description
This paper revisits the debate on the design of fiscal rules in resource-rich countries. Its main objective is to assess alternative systems of rules against their policy objectives, while taking into account country characteristics. One of the contributions of the paper is to propose fiscal frameworks that are centered around the principle of insurance against shocks and less reliant on estimating precisely resource wealth, which tends to be highly volatile.
Author: Mr.James Daniel Publisher: International Monetary Fund ISBN: 9781589065130 Category : Business & Economics Languages : en Pages : 80
Book Description
The pamphlet (which updates the 1995 Guidelines for Fiscal Adjustment) presents the IMF’s approach to fiscal adjustment, and focuses on the role that sound government finances play in promoting macroeconomic stability and growth. Structured around five practical questions—when to adjust, how to assess the fiscal position, what makes for successful adjustment, how to carry out adjustment, and which institutions can help—it covers topics such as tax policies, debt sustainability, fiscal responsibility laws, and transparency.
Author: Hua Chai
Author: Hua Chai
Author: M. Ayhan Kose
Author: International Monetary Fund
Author: S. Ali Abbas
Author: International Monetary Fund
Author: Luc Eyraud
Author: International Monetary Fund. Western Hemisphere Dept.
Author: International Monetary Fund. Monetary and Capital Markets Department
Author: Mr. Luc Eyraud
Author: Mr.James Daniel