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International comparisons of fiscal policy: the OECD and the IMF measures of fiscal impulse


  • Garry J. Schinasi


Both the OECD and the IMF periodically estimate and publish measures of fiscal impulse to gauge the extent to which fiscal policy in the major industrial countries has become more or less expansive over time. This paper compares these measures analytically and numerically. The paper shows that the OECD and IMF measures of fiscal impulse differ in at least four fundamental ways: (1) the OECD includes fiscal drag under the presumption that it is part of the "structure" of fiscal policy, while the IMF excludes it from its adjusted measure of the budget balance; (2) the OECD and the IMF both adjust for cyclical factors but they do so differently; (3) the OECD estimates its marginal tax and expenditure rates from a structural model whereas the IMF assumes unit income-elasticity of its parameters and uses historical average tax and spending rates; and (4) each agency uses different estimates of potential output. The paper then numerically allocates differences in the published figures of the OECD and the IMF to these various sources. The paper assesses the usefulness of each measure.

Suggested Citation

  • Garry J. Schinasi, 1986. "International comparisons of fiscal policy: the OECD and the IMF measures of fiscal impulse," International Finance Discussion Papers 274, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgif:274

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    References listed on IDEAS

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    5. Blanchard, Olivier J, 1985. "Debt, Deficits, and Finite Horizons," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 223-247, April.
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    7. Frenkel, Jacob A. & Aizenman, Joshua, 1982. "Aspects of the optimal management of exchange rates," Journal of International Economics, Elsevier, vol. 13(3-4), pages 231-256, November.
    8. Enders, Walter & Lapan, Harvey E., 1979. "Stability, Random Disturbances, and the Exchange Rate Regime," ISU General Staff Papers 197907010700001067, Iowa State University, Department of Economics.
    9. Kenneth S. Chan, 1982. "Rational Expectations and the Optimal Foreign Exchange Regimes," Canadian Journal of Economics, Canadian Economics Association, vol. 15(1), pages 164-174, February.
    10. Bewley, R A, 1982. "On the Functional Form of Engel Curves: The Australian Household Expenditure Survey, 1975-76," The Economic Record, The Economic Society of Australia, vol. 58(160), pages 82-91, March.
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    Cited by:

    1. Signe Krogstrup, 2002. "Should We Pay Attention to Indicators of Fiscal Impact on Demand?," IHEID Working Papers 01-2002, Economics Section, The Graduate Institute of International Studies.


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