Accounting for One-Off Operations When Assessing Underlying Fiscal Positions
Posted: 1 Jun 2010
Date Written: December 1, 2008
Frequent recourse to large one-off operations in a number of OECD countries has undermined the accuracy of cyclically adjusted fiscal balances as a measure of both the sustainability of public finance and the fiscal stance. This paper first provides detailed information on the nature and amount of these one-offs for 9 OECD countries. The paper then presents a new indicator – the “underlying” fiscal balance – which effectively eliminates the impact of one-offs and cyclical developments. One-offs are derived as the deviations from trend in net capital transfers, i.e. from widely available national account data. This approach provides a consistent treatment of one-offs both across countries and over time, avoiding the potential information biases which could result from an individual identification of one-offs.
Keywords: One-off fiscal operations, fiscal balances, cyclically adjusted fiscal balances, underlying fiscal
JEL Classification: E62, H3, H6
Suggested Citation: Suggested Citation