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Finland’s Public Sector Balance Sheet: A Novel Approach to Analysis of Public Finance

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  • Maren Brede
  • Christian Henn

Abstract

We construct a comprehensive public sector balance sheet for Finland from 2000 to 2016 by complementing general government statistics with data on public corporations and public pensions. We show that exposure to valuation changes in equity markets through asset holdings and increases in pension liabilities relative to GDP amplify crisis impacts on public finances. We expand the balance sheet by including present value estimates of future fiscal flows; this allows us to perform fiscal stress tests and policy experiments. These analyses suggest that Finland’s public finances will remain sound provided ongoing reform and consolidation efforts to address aging pressures are implemented as planned.

Suggested Citation

  • Maren Brede & Christian Henn, 2018. "Finland’s Public Sector Balance Sheet: A Novel Approach to Analysis of Public Finance," IMF Working Papers 2018/078, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2018/078
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    References listed on IDEAS

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    Cited by:

    1. Mr. Seyed Reza Yousefi, 2019. "Public Sector Balance Sheet Strength and the Macro Economy," IMF Working Papers 2019/170, International Monetary Fund.
    2. Matteo Ruzzante, 2018. "Financial Crises, Macroeconomic Shocks, and the Government Balance Sheet: A Panel Analysis," IMF Working Papers 2018/093, International Monetary Fund.
    3. Yugo Koshima, 2019. "Japan's Public Sector Balance Sheet," IMF Working Papers 2019/212, International Monetary Fund.
    4. Ezequiel Cabezon & Christian Henn, 2018. "Counting the Oil Money and the Elderly: Norway's Public Sector Balance Sheet," IMF Working Papers 2018/190, International Monetary Fund.

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