Political actors often get in the way of financial stability due to competing interests between stakeholders that have a lot to gain through not implementing changes that would benefit society as a whole. [17], Key aspects that influence the age-dependency ratio: [17]. {\displaystyle r} Is the Current Account Deficit Sustainable? • In addition to above, budget has also made provision for higher capital expenditure, with a clear indication towards positive outcome through sustainable development.

Although longevity is an arguably positive outcome, when paired with a decline in fertility it can create higher financial stress on working people. KC-BC-19-001-EN-N (online) ", Campbell, John Y & Shiller, Robert J, 1987. There is no consensus among economists about the correct criterion/definition to be used for fiscal sustainability. © 1985 International Monetary Fund The “fiscal compact”, passed at the urging of Germany in 2012, obliges governments to try to keep structural deficits close to zero. • The current budget provides fiscal space to the policymakers in augmenting agriculture, health, education and infrastructure development. ", Anthony Birchwood & Rudolph Matthias, 2007. "Deficits and intergenerational welfare in open economies", "A note on public debt, tax-exempt bonds, and Ponzi games", "A Practical Guide to Public Debt Dynamics, Fiscal Sustainability, and Cyclical Adjustment of Budgetary Aggregates (Technical notes and Manuals)", "Some Approaches for Assessing the Sustainability of Public Finances. This report looks at the long-run economic and fiscal implications of Europe's ageing population. https://triumphias.com/pages-all-courses.php, Your email address will not be published. Si así lo hiciera, la razón entre los bonos y el PNB se elevaría indefinidamente, por lo que sería realista suponer que en algún momento los inversionistas se negarían a seguir adquiriendo deuda del Estado.

", Campbell, John & Shiller, Robert, 1987.

Adjusting the size of the benefits entails reducing the benefit ratio, i.e. Click the link below to see the details about the UPSC –Civils courses offered by Triumph IAS. /// Dans de nombreux pays industrialisés, les déficits publics élevés et persistants, qui ont pour effet d'accroître la dette publique en proportion du produit national brut (PNB) et de la richesse totale du secteur privé, suscitent des préoccupations considérables en raison de leurs effets défavorables potentiels sur le stock de capital productif. JSTOR®, the JSTOR logo, JPASS®, Artstor®, Reveal Digital™ and ITHAKA® are registered trademarks of ITHAKA.

Please note that corrections may take a couple of weeks to filter through ", Andrew B. Abel & N. Gregory Mankiw & Lawrence H. Summers & Richard J. Zeckhauser, 1989. Request Permissions. • Owing to implementation of FRBMA as a mechanism and policy intervention, the estimated fiscal deficit has decreased till 2008-09, but later did not follow the path of fiscal discipline. Large values of domestically held debt are simply a redistribution from future to current taxpayers. is the stock of public debt,

This report provides an overview of the short, medium, and long-term fiscal sustainability challenges facing EU Member States. If private investors expect an eventual cessation of bond financing to lead to money financing, and hence to a loss in the real value of their bond and money holdings, then they are likely to demand compensation in the form of higher interest rates. El déficit primario resultante y los pagos de transferencia necesarios para el servicio de la deuda pendiente se financian de forma inicial mediante la emisión de bonos.

• Budget has set the fiscal deficit target of 3.5% of GDP, with a plan for augmented capital expenditure. Our findings challenge established views about what constitutes a good combination of fiscal and monetary policies. The distinction between domestic and foreign-currency borrowing is central; concessional lending and grants may also make an important contribution to fiscal finance. b This paper surveys the recent literature analysing fiscal deficit sustainability, most of which focuses on the U.S. and other industrial countries, in an attempt to assess its potential usefulness in the developing country context. • Besides, emphasis is given to rationalizing and scrutinising all kind of revenue expenditure in tune which the long-term fiscal goals and adhering to quality expenditure. r Government's inter-temporal budget constraint, Demographic impacts on fiscal sustainability, Political barriers for fiscal sustainability.

{\displaystyle b_{t}}

General contact details of provider: https://econwpa.ub.uni-muenchen.de . • Further, the government has suggested to have the value of fiscal deficit to be in a ‘range’ than a ‘fixed value’; in order to provide fiscal space to the government to accommodate any global shocks and economic uncertainties. Access supplemental materials and multimedia. ", Anand, Ritu & van Wijnbergen, Sweder, 1989.

That is, the government debt must be backed by expected future cash flows. ", Marco Arnone & Luca Bandiera & Andrea Presbitero, 2005. A Ricardian Analysis, Government Ponzi games and the sustainability of public deficits under uncertainty, Inflation and the Financing of Government Expenditure: An Introductory Analysis with an Application to Turkey, On the Limitations of Government Borrowing: A Framework for EmpiricalTesting, On the Limitations of Government Borrowing: A Framework for Empirical Testing, Cointegration and Tests of Present Value Models, Fiscal Adjustment in Pakistan: Some Simulation Results, The Sustainability of Budget Deficits in a Stochastic Economy, The Sutainability Of Budget Deficits In A Stochastic Economy, Intertemporal Tax-Smoothing and the Government Budget Surplus: Canada and the United States, A study of debt servicing capacity applying logit analysis, A Study of Debt Servicing Capacity Applying Logit Analysis, Present value tests of an intertemporal model of the current account, Present Value Tests Of An Intertemporal Model Of The Current Account. If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form . • To achieve fiscal consolidation and prudent fiscal management, the Government of India has enacted FRBMA (Fiscal Responsibility and Budget Management Act-2003. Monetary and fiscal policy can both be active at the same time.”. is the primary balance to GDP ratio. Many economists have voiced grave concerns over using inter-temporal budget constraint as a de facto definition or criterion for fiscal sustainability. ", Feder, Gershon & Just, Richard E., 1976. Aunque esta situación no puede persistir eternamente, surge la incertidumbre en cuanto a si en el período siguiente el gobierno decidirá modificar su política de financiamiento y sobre la forma que revista dicha modificación: aumentando la oferta monetaria ("monetización del déficit") o aumentando los impuestos. For example, the infinite horizon tax gap, or S2 sustainability indicator in European Commission phraseology is defined as: where b Recent projections developed by the UN Population Division estimate a 40 percent increase in world population and 7.8 years increase in the median age over the next 40 years. • Besides, emphasis is given to rationalizing and scrutinising all kind of revenue expenditure in tune which the long-term fiscal goals and adhering to quality expenditure. JSTOR is part of ITHAKA, a not-for-profit organization helping the academic community use digital technologies to preserve the scholarly record and to advance research and teaching in sustainable ways. Increase in sharing of fund for capital expenditure symbolizes the fiscal outlook of the current budget. In contrast to both leading contenders, we show that the price level may fail to be anchored by economic fundamentals and, within certain bounds, the average price of commodities may wander aimlessly driven by the self-fulfilling beliefs of market participants.

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