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Fiscal Reform and Fiscal Sustainability: Evidence from Australia and Sweden

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  • Tomomi Miyazaki

    (Graduate School of Economics, Kobe University)

Abstract

This paper examines how the adoption of a fiscal rule affects the sustainability of fiscal policy in two OECD countries; Australia and Sweden. While recent fiscal reforms undertaken in both these countries are useful for ensuring the sustainability of government budgets, there are a few differences. In Australia, we show that government revenues are not necessarily growing at a faster rate than government expenditures, at least from the viewpoint of a statistical long-run relationship. In contrast, in Sweden, we show the reform is more beneficial for the attainment of a budget surplus.

Suggested Citation

  • Tomomi Miyazaki, 2014. "Fiscal Reform and Fiscal Sustainability: Evidence from Australia and Sweden," Discussion Papers 1407, Graduate School of Economics, Kobe University.
  • Handle: RePEc:koe:wpaper:1407
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    Cited by:

    1. Sinem Kilic Celik & M. Ayhan Kose & Franziska Ohnsorge, 2020. "Subdued Potential Growth: Sources and Remedies," Koç University-TUSIAD Economic Research Forum Working Papers 2009, Koc University-TUSIAD Economic Research Forum.
    2. Matt Andrews & Lant Pritchett & Michael Woolcock, 2015. "Doing Problem Driven Work," CID Working Papers 307, Center for International Development at Harvard University.
    3. Heinemann, Friedrich & Moessinger, Marc-Daniel & Yeter, Mustafa, 2018. "Do fiscal rules constrain fiscal policy? A meta-regression-analysis," European Journal of Political Economy, Elsevier, vol. 51(C), pages 69-92.
    4. Lennart Erixon, 2015. "Can fiscal austerity be expansionary in present-day Europe? The lessons from Sweden," Review of Keynesian Economics, Edward Elgar Publishing, vol. 3(4), pages 567—601-5, October.
    5. Andrews, Matt & Pritchett, Lant & Woolcock, Michael, 2017. "Building State Capability: Evidence, Analysis, Action," OUP Catalogue, Oxford University Press, number 9780198747482.
    6. Matt Andrews, 2015. "Has Sweden Injected Realism into Public Financial Management Reforms in Partner Countries?," CID Working Papers 303, Center for International Development at Harvard University.
    7. Tomomi Miyazaki & Kazuki Onji, 2017. "The Sustainability of Japan's Government Debt: A Review," Discussion Papers 1716, Graduate School of Economics, Kobe University.
    8. Andrews, Matt, 2015. "Has Sweden Injected Realism into Public Financial Management Reforms in Partner Countries?," Working Paper Series 15-063, Harvard University, John F. Kennedy School of Government.

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    More about this item

    Keywords

    Fiscal reform; Sustainability of fiscal policy; Expenditure ceilings; Dynamic OLS;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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