Fiscal Adjustment in EU Countries: A Balance Sheet Approach

26 Pages Posted: 15 Feb 2006

See all articles by Gian Maria Milesi-Ferretti

Gian Maria Milesi-Ferretti

International Monetary Fund (IMF); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Kenji Moriyama

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: August 2004

Abstract

Several European Union countries have recently implemented or are envisaging fiscal operations that improve budgetary figures but have no structural impact on government finances. This paper evaluates some of these measures using a balance sheet approach. In particular, it examines the degree to which reductions in government debt in EU countries has been accompanied by a decumulation of government assets. In the run-up to Maastricht (1997) it finds a strong correlation between changes in government liabilities and government assets, and larger declines in government assets in countries starting from higher public debt levels.

Keywords: Fiscal balance, government debt, government assets, net worth

JEL Classification: H62, H63

Suggested Citation

Milesi-Ferretti, Gian Maria and Moriyama, Kenji, Fiscal Adjustment in EU Countries: A Balance Sheet Approach (August 2004). IMF Working Paper, Vol. , pp. 1-26, 2004. Available at SSRN: https://ssrn.com/abstract=878968

Gian Maria Milesi-Ferretti (Contact Author)

International Monetary Fund (IMF) ( email )

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

Kenji Moriyama

International Monetary Fund (IMF) ( email )

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