IDEAS home Printed from https://ideas.repec.org/a/sae/niesru/v165y1998i1p25-34.html
   My bibliography  Save this article

Fiscal report

Author

Listed:
  • Martin Weale
  • Garry Young

Abstract

The government's Economic and Fiscal Strategy Report (EFSR), published on 11 June, set out its fiscal strategy and its overall spending plans for the years ahead. Strategically, the government stressed the distinction between cur rent and capital spending and committed itself to borrowing no more than what is necessary to finance capital investment over the economic cycle. It also committed itself to maintaining debt at prudent levels, thereby limiting the amount that it is prepared to spend on capital items. We devote the bulk of this fiscal report to an alternative analysis of government expenditure, arguing that the distinction between consumption and capital investment, which the government is keen to make on the expenditure side, should also be made on the revenue side. It is possible to distinguish taxes paid out of consumption from those paid out of saving and thus to calculate the extent to which the government adds to consumption or saving in the economy as a whole. From a macroeconomic perspective this is much more important than whether the govern ment achieves any particular target values for the public sector net cash requirement (the old PSBR). One might also question whether there is any merit in the 'golden rule' that public borrowing should not exceed public net investment over the cycle if public borrowing is kept down through the imposition of taxes which are paid mainly out of saving. Logically the government ought to be more concerned about its impact on the level of saving in the economy as a whole than about whether it follows the golden rule. However we begin by providing our independ ent assessment of the budget situation from the conventional perspective.

Suggested Citation

  • Martin Weale & Garry Young, 1998. "Fiscal report," National Institute Economic Review, National Institute of Economic and Social Research, vol. 165(1), pages 25-34, July.
  • Handle: RePEc:sae:niesru:v:165:y:1998:i:1:p:25-34
    as

    Download full text from publisher

    File URL: http://ner.sagepub.com/content/165/1/25.abstract
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:niesru:v:165:y:1998:i:1:p:25-34. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: https://edirc.repec.org/data/niesruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.