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Measuring Aspects of Fiscal and Financial Policy

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  • Willem H. Buiter

Abstract

The paper develops a forward-looking comprehensive accounting framework for the public sector.By integrating the public sector budget constraint forward in time the government's present value budget constraint (PVBC) is obtained. In addition to the familiar financial assets and liabilities, comprehensive public sector networth contains the following items: the value of the public sector capital stock; the value of public sector property rights in landand natural resources; the present value of future seigniorage, the present value of future taxes net of transfers and subsidies and the present value of future planned public sector capital formation, privatization or nationalization programmes. From the "stock" PVBC a number of different "flow" deficit concepts are derived; each one emphasizes a different aspect of the"sustainability" of current and/or prospective fiscal and financial plans. Together they provide a framework for organizing facts and plans about fiscal, financial and monetary policy and for evaluating the consistency of spending and revenue projections or scenarios,public sector debt objectives and monetary targets.

Suggested Citation

  • Willem H. Buiter, 1984. "Measuring Aspects of Fiscal and Financial Policy," NBER Working Papers 1332, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1332
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    1. Olivier J. Blanchard, 1991. "Current and Anticipated Deficits, Interest Rates and Economic Activity," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 361-390, National Bureau of Economic Research, Inc.
    2. Thomas J. Sargent & Neil Wallace, 1984. "Some Unpleasant Monetarist Arithmetic," Palgrave Macmillan Books, in: Brian Griffiths & Geoffrey E. Wood (ed.), Monetarism in the United Kingdom, pages 15-41, Palgrave Macmillan.
    3. Buiter, Willem H., 1984. "Allocative and Stabilisation Aspects of Budgetary and Financial Policy," CEPR Discussion Papers 2, C.E.P.R. Discussion Papers.
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    5. Willem H. Buiter, 1983. "The Theory of Optimum Deficits and Debt," NBER Working Papers 1232, National Bureau of Economic Research, Inc.
    6. Willem H. Buiter, 1984. "Comment on T. J. Sargent and N. Wallace: Some Unpleasant Monetarist Arithmetic," Palgrave Macmillan Books, in: Brian Griffiths & Geoffrey E. Wood (ed.), Monetarism in the United Kingdom, pages 42-60, Palgrave Macmillan.
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    11. Thomas J. Sargent, 1981. "Stopping moderate inflations: the methods of Poincaré and Thatcher," Working Papers 1, Federal Reserve Bank of Minneapolis.
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    13. Willem H. Buiter, 1983. "Deficits, Crowding Out and Inflation: The Simple Analytics," NBER Working Papers 1078, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Timothy Irwin & Oscar Parkyn, 2009. "Improving the Management of the Crown’s Exposure to Risk," Treasury Working Paper Series 09/06, New Zealand Treasury.
    2. Bhatt, Antra, 2010. "Revisiting Indicators of Public Debt Sustainability: Capital Expenditure, Growth and Public Debt in India," MPRA Paper 27422, University Library of Munich, Germany.

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