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Cyclically Adjusted Fiscal Balance: OECD and ESCB Methods


  • Vladimír Bezdìk
  • Kamil Dybzcak
  • Aleš Kreidl


The paper considers the impact of the business cycle on Czech fiscal balance in the past decade. The authors employed two different calculation methods in their analysis: an OECD and an ESCB method. Two crucial findings emerged from the analysis. First, the estimates of cyclically adjusted deficits in the Czech Republic proved their robustness, because both our calculation methods, although being philosophically different, provided very similar results. Sharply deteriorating Czech budget deficits are basically structural in nature, i.e., they are independent of the business cycle. Moreover, another hypothesis was confirmed: Czech fiscal policy exhibits mainly pro-cyclical features. As the paper further documents, both basic assessments held true even when quasi-fiscal deficits were included in the analysis.

Suggested Citation

  • Vladimír Bezdìk & Kamil Dybzcak & Aleš Kreidl, 2003. "Cyclically Adjusted Fiscal Balance: OECD and ESCB Methods," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 53(11-12), pages 477-509, December.
  • Handle: RePEc:fau:fauart:v:53:y:2003:i:11-12:p:477-509

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    More about this item


    off-budget transactions; quasi-fiscal policy; cyclically adjusted balance; fiscal stance; fiscal policy;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts


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