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Long-term fiscal sustainability in advanced economies

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  • Alan J. Auerbach

Abstract

This paper provides an evaluation of the long-term fiscal sustainability of advanced economies, based on current estimates of these economies’ current-policy fiscal trajectories. As will be quite evident, for many countries short-term fiscal measures, such as the debt-GDP ratio and the current budget deficit as a share of GDP, bear little relationship to the sustainability of policy. Some countries appear to be on relatively sustainable paths despite challenging short-run statistics, while for others benign short-term measures mask very large long-term problems. Of course, the future is uncertain while the present is known, so one may be tempted to discount negative long-term projections. But, based as they are on a demographic transition that is surely underway, one can discount particular estimates but not their general direction.

Suggested Citation

  • Alan J. Auerbach, 2015. "Long-term fiscal sustainability in advanced economies," Governance Working Papers 24835, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:govern:24835
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    File URL: http://www.eaber.org/node/24835
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    References listed on IDEAS

    as
    1. Congressional Budget Office, 2014. "The 2014 Long-Term Budget Outlook," Reports 45471, Congressional Budget Office.
    2. Congressional Budget Office, 2014. "The 2014 Long-Term Budget Outlook," Reports 45471, Congressional Budget Office.
    3. repec:ifs:fistud:v:38:y:2017:i::p:667-700 is not listed on IDEAS
    4. Alan J. Auerbach, 2008. "Federal Budget Rules: The US Experience," NBER Working Papers 14288, National Bureau of Economic Research, Inc.
    5. Alan J Auerbach, 2011. "Long-term fiscal sustainability in major economies," BIS Working Papers 361, Bank for International Settlements.
    6. Xavier Debrun & Tidiane Kinda, 2017. "Strengthening Post‐Crisis Fiscal Credibility: Fiscal Councils on the Rise – A New Dataset," Fiscal Studies, Institute for Fiscal Studies, vol. 38, pages 667-700, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Fiscal Sustainability; public debt; Fiscal Gap;

    JEL classification:

    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt

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