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Fiscal Risk Assessment at the CBR: A Conceptual Framework

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  • Ludovit Odor

    () (Council for Budget Responsibility)

Abstract

To identify fiscal risk, the CBR uses a pragmatic approach by employing a set of models and indicators, quantitative and qualitative assessments organized in a coherent framework. The inter-temporal net worth serves as an organizing principle. It has the advantage over other frameworks that: i) is directly comparable to budget figures (both ex-ante and ex-post), ii) easier to communicate to policy makers, iii) do not rely on ad-hoc categories but is directly linked to the inter-temporal budget constraint, iv) is embedded in the constitutional Act on Fiscal Responsibility and v)promotes easier detection of fiscal gimmicky. This paper also briefly summarizes the toolkit of the CBR and proposes three „communication devices“, which can in our view help to increase the understanding of fiscal risks among policymakers and the general public.

Suggested Citation

  • Ludovit Odor, 2014. "Fiscal Risk Assessment at the CBR: A Conceptual Framework," Discussion Papers Discussion Paper No. 1/20, Council for Budget Responsibility.
  • Handle: RePEc:cbe:dpaper:201401
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    File URL: https://www.rozpoctovarada.sk/download2/RiskatCBR_DP_012014_01.pdf
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    References listed on IDEAS

    as
    1. Michal Horvath & Ludivit Odor, 2009. "Making Fiscal Commitments Credible," Working and Discussion Papers DP 2/2009, Research Department, National Bank of Slovakia.
    2. Hana Polackova Brixi & Allen Schick, 2002. "Government at Risk : Contingent Liabilities and Fiscal Risk," World Bank Publications, The World Bank, number 15233.
    3. Katia Berti & Matteo Salto & Matthieu Lequien, 2012. "An early-detection index of fiscal stress for EU countries," European Economy - Economic Papers 2008 - 2015 475, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    4. Elif C Arbatli & Emre Alper & Jiri Jonas & Anke Weber & Marc Gerard & Tidiane Kinda & Giovanni Callegari & Anna Shabunina & Andrea Schaechter & Carlos Caceres, 2012. "A toolkit for Assessing Fiscal Vulnerabilities and Risks in Advanced Economies," IMF Working Papers 12/11, International Monetary Fund.
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    Cited by:

    1. Zuzana Mucka, 2015. "Is the Maastricht debt limit safe enough for Slovakia?," Working Papers Working Paper No. 2/2015, Council for Budget Responsibility.

    More about this item

    Keywords

    fiscal risk; contingent liabilities; fiscal limit;

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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