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One-off and off-budget items: An alternative approach

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  • Gábor P. Kiss

    (Magyar Nemzeti Bank (central bank of Hungary))

Abstract

Fiscal analysis requires a set of indicators. For calculating the structural deficit, it is examined whether measures have permanent or temporary budgetary impacts, if any (creative accounting). For measuring fiscal impulse, it is examined when a given measure has a ‘true’ economic impact, if ever (creative accounting). For example, capital transfers to cover the losses of quasi-fiscal activities do not spread to the actual (‘true’) period of time by accrual recording. It is important to remove such illusory items from statistical expenditures and revenues, but in order to account for the ‘true’ effect, expenditures must be augmented, e.g. by quasi-fiscal losses and PPP investment. This type of analytical indicator has been employed by the central bank of Hungary for a decade. According to our experience, this ‘true’ measure is consistent in a macroeconomic sense and methodologically more robust than the statistical deficit, which often requires a subsequent upward revision. This kind of analytical methodology allows flexibility supported by expert judgement, and at the same time it requires transparency of methods and data.

Suggested Citation

  • Gábor P. Kiss, 2007. "One-off and off-budget items: An alternative approach," MNB Conference Volume, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 1(1), pages 18-27, December.
    • Handle: RePEc:mnb:confer:v:1:y:2007:i:1:p:18-27
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    References listed on IDEAS

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    Cited by:

    1. Daniele Franco (editor), 2012. "Rules and institutions for sound fiscal policy after the crisis," Workshop and Conferences 11, Bank of Italy, Economic Research and International Relations Area.
    2. Dubravko Mihaljek, 2007. "Fiscal transparency from central banks’ perspective: off-budget activities and government asset funds," MNB Conference Volume, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 1(1), pages 9-17, December.
    3. Gábor P. Kiss, 2011. "Moving target indication: Fiscal indicators employed by the Magyar Nemzeti Bank," MNB Occasional Papers 2011/92, Magyar Nemzeti Bank (Central Bank of Hungary).

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    More about this item

    Keywords

    creative accounting; quasi-fiscal activities; private-public-partnership.;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H19 - Public Economics - - Structure and Scope of Government - - - Other
    • H69 - Public Economics - - National Budget, Deficit, and Debt - - - Other

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