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Structural budget balance: the pilar of the new chilean fiscal policy rule


  • Mario Marcel C.
  • Marcelo Tokman R.
  • Rodrigo Valdés P.
  • Paula Benavides S.


This paper develops the structural budget balance methodology, adopted for use in the Chilean public sector. The structural balance methodology adjusts fiscal accounts so they reflect changes in net worth and makes it possible to isolate changes in fiscal policy resulting from the main exogenous factors determining fiscal revenues: GDP and copper price. This facilitates the analysis and evaluation of fiscal policy in Chile, which, since 2000, has focused on achieving a structural budget surplus, thus ensuring the existence of counter-cyclical fiscal policy in a framework of robust fiscal accounts.

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  • Mario Marcel C. & Marcelo Tokman R. & Rodrigo Valdés P. & Paula Benavides S., 2001. "Structural budget balance: the pilar of the new chilean fiscal policy rule," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 4(3), pages 15-27, December.
  • Handle: RePEc:chb:bcchec:v:4:y:2001:i:3:p:15-27

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    References listed on IDEAS

    1. Robert P. Hagemann, 1999. "The Structural Budget Balance The IMF’s Methodology," IMF Working Papers 99/95, International Monetary Fund.
    2. Claude Giorno & Pete Richardson & Deborah Roseveare & Paul van den Noord, 1995. "Estimating Potential Output, Output Gaps and Structural Budget Balances," OECD Economics Department Working Papers 152, OECD Publishing.
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    Cited by:

    1. Luis Felipe Céspedes & Ilan Goldfajn & Phil Lowe & Rodrigo O. Valdés, 2006. "Policy Responses to External Shocks: The Experiences of Australia, Brazil, and Chile," Central Banking, Analysis, and Economic Policies Book Series,in: Ricardo Caballero & César Calderón & Luis Felipe Céspedes & Norman Loayza (Series Editor) & Klaus Sc (ed.), External Vulnerability and Preventive Policies, edition 1, volume 10, chapter 5, pages 109-170 Central Bank of Chile.
    2. Juan A. Correa & Christian Ferrada & Pablo Gutiérrez & Francisco Parro, 2014. "Effects of fiscal policy on private consumption: evidence from structural-balance fiscal rule deviations," Applied Economics Letters, Taylor & Francis Journals, vol. 21(11), pages 776-781, July.

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