Assessing Fiscal Sustainability in Theory and Practice

Chalk, Nigel; Hemming, Richard

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Assessing Fiscal Sustainability in Theory and Practice

IMF Working Paper No. 00/81

27 Pages Posted: 30 Jan 2006

See all articles by Nigel Chalk

Richard Hemming

International Monetary Fund (IMF)

There are 2 versions of this paper

Date Written: April 2000

Abstract

The main purpose of this paper is to provide an overview of approaches to assessing fiscal sustainability. It summarizes the general analytical background, focusing on the present value budget constraint, which is the benchmark against which solvency is determined, tests of sustainability (including sustainability indicators), and sustainability and uncertainty. The paper then looks at the way in which fiscal sustainability has been assessed in different types of IMF work. Finally the link between fiscal and external sustainability is discussed.

Keywords: Government deficits and debt, present value budget constraint, sustainability indicators

JEL Classification: E60, H60

Suggested Citation: Suggested Citation

Chalk, Nigel and Hemming, Richard, Assessing Fiscal Sustainability in Theory and Practice (April 2000). IMF Working Paper No. 00/81, Available at SSRN: https://ssrn.com/abstract=879604