IDEAS home Printed from https://ideas.repec.org/p/cbe/dpaper/201201.html
   My bibliography  Save this paper

How to evaluate the long-term sustainability of public finances?

Author

Listed:
  • Ludovit Odor

    (Council for Budget Responsibility)

Abstract

The sustainability of public finances is a complex concept that needs to be analyzed through different angles. The Council for Budget Responsibility has decided to analyze long-term trends from four spects: (1) solvency, (2) intergenerational equity (fairness), (3) growth, and (4) stability. In its reports, the CBR will present its views on both stock values and flow values. The ‘net worth’ features prominently among stock values in that it captures both the past and future effects. At the same time, it serves as a benchmark for public finance transparency. The summary long-term sustainability indicator will quantify the permanent changes in taxes or expenditures that are necessary to keep the public debt in the next 50 years below the upper limit set by the law. The indicator will be quantified based on the baseline scenario which simulates long-term trends without changes in the existing policies. The other useful analyses include, in particular, generational accounts, models of the links between fiscal and macroeconomic performance, and sensitivity analyses. A comprehensive picture of the condition of public finances can also be derived from various models of convergence of the Slovak economy, the cost-of-delay indicators, or more detailed analyses of contingent liabilities. CBR’s long-term sustainability reports should bring useful information to both the expert community and public at large, and become a default basis for decisions on areas such as the budget, pension system and healthcare.

Suggested Citation

  • Ludovit Odor, 2012. "How to evaluate the long-term sustainability of public finances?," Discussion Papers Discussion Paper No. 1/20, Council for Budget Responsibility.
  • Handle: RePEc:cbe:dpaper:201201
    as

    Download full text from publisher

    File URL: https://www.rozpoctovarada.sk/download2/dp1_2012_final_eng.pdf
    Download Restriction: no
    ---><---

    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:cbe:dpaper:201201. See general information about how to correct material in RePEc.

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

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.