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A Decomposition of Austria's General Government Budget into Structural and Cyclical Components

Author

Listed:
  • Serguei Kaniovski
  • Hans Pitlik
  • Sandra Steindl
  • Thomas Url

    (WIFO)

Abstract

The paper describes a model for computing the trend output and the structural budget deficit in Austria. The calculation of trend output is based on a production function approach within a small macroeconomic model of the Austrian economy. A decomposition of public budgets into cyclical and structural components shows responsiveness to business cycle variations, and allows a better assessment of the sustainability of the budget balance. The model will be used in future forecasting rounds and links macroeconomic and budgetary variables of the WIFO Economic Outlook to estimates for trend output and the structural budget deficit. Until now, such decomposition has not been part of the regular WIFO forecast.

Suggested Citation

  • Serguei Kaniovski & Hans Pitlik & Sandra Steindl & Thomas Url, 2008. "A Decomposition of Austria's General Government Budget into Structural and Cyclical Components," WIFO Working Papers 316, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2008:i:316
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    References listed on IDEAS

    as
    1. Nathalie Girouard & Christophe André, 2005. "Measuring Cyclically-adjusted Budget Balances for OECD Countries," OECD Economics Department Working Papers 434, OECD Publishing.
    2. Fritz Breuss & Serguei Kaniovski & Thomas Url, 2007. "WIFO-Weißbuch: Modellsimulationen wirtschaftspolitischer Maßnahmen zur Förderung von Wachstum und Beschäftigung," WIFO Monatsberichte (monthly reports), WIFO, vol. 80(3), pages 263-274, March.
    3. Cécile Denis & Daniel Grenouilleau & Kieran Mc Morrow & Werner Röger, 2006. "Calculating potential growth rates and output gaps - A revised production function approach," European Economy - Economic Papers 2008 - 2015 247, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    5. Marcus Scheiblecker, 2007. "Datierung von Konjunkturwendepunkten in Österreich," WIFO Monatsberichte (monthly reports), WIFO, vol. 80(9), pages 715-730, September.
    6. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 15-90, National Bureau of Economic Research, Inc.
    7. Thomas Url, 1997. "How Serious is the Pact on Stability and Growth?," WIFO Working Papers 92, WIFO.
    8. Fritz Breuss, 1984. "Konjunkturindikatoren für die österreichische Wirtschaft," WIFO Monatsberichte (monthly reports), WIFO, vol. 57(8), pages 464-492, August.
    9. Thomas Url, 2001. "The Cyclical Adjustment of the Austrian Budget Balance by the European Central Bank," Austrian Economic Quarterly, WIFO, vol. 6(1), pages 36-45, October.
    10. Franz R. Hahn & Ewald Walterskirchen, 1992. "Stylized Facts der Konjunkturschwankungen in Österreich, Deutschland und den USA," WIFO Working Papers 58, WIFO.
    11. Gustav Horn & Camille Logeay & Silke Tober, 2007. "Methodological Issues of Medium-Term Macroeconomic Projections - The Case of Potential Output," IMK Studies 04-2007, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    12. Blanchard, Olivier J. & Summers, Lawrence H., 1987. "Hysteresis in unemployment," European Economic Review, Elsevier, vol. 31(1-2), pages 288-295.
    13. Franz R. Hahn & Gerhard Rünstler, 1996. "Potential-Output-Messung für Österreich," WIFO Monatsberichte (monthly reports), WIFO, vol. 69(3), pages 223-234, March.
    14. Sandra Steindl, 2006. "Potentialwachstum in Österreich. Schätzung und Diskussion der angebotsseitigen Wachstumschancen," WIFO Monatsberichte (monthly reports), WIFO, vol. 79(12), pages 881-891, December.
    15. Christopher A. Pissarides, 1992. "Loss of Skill During Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(4), pages 1371-1391.
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    Cited by:

    1. Ulrike Mühlberger & Alois Guger & Käthe Knittler & Margit Schratzenstaller, 2008. "Alternative Finanzierungsformen der Pflegevorsorge," WIFO Studies, WIFO, number 33620, February.
    2. Stefan Ederer & Serguei Kaniovski & Hans Pitlik & Thomas Url, 2012. "Verhaltener Konjunkturaufschwung nach Wachstumsdelle 2012. Mittelfristige Prognose der österreichischen Wirtschaft bis 2016," WIFO Monatsberichte (monthly reports), WIFO, vol. 85(1), pages 51-62, January.
    3. Fritz Breuss & Serguei Kaniovski & Margit Schratzenstaller, 2009. "Gesamtwirtschaftliche Auswirkungen der Konjunkturpakete I und II und der Steuerreform 2009," WIFO Studies, WIFO, number 36361, February.
    4. Josef Baumgartner & Serguei Kaniovski & Hans Pitlik & Margit Schratzenstaller & Thomas Url, 2011. "Exports Drive Growth – Domestic Demand Remains Subdued. Medium-term Projections for the Austrian Economy until 2015," Austrian Economic Quarterly, WIFO, vol. 16(1), pages 21-34, March.
    5. Stefan Ederer & Serguei Kaniovski & Hans Pitlik & Thomas Url, 2012. "Slow Upturn Following Soft Patch in 2012. Medium-term Forecast of the Austrian Economy until 2016," Austrian Economic Quarterly, WIFO, vol. 17(1), pages 12-23, February.

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    Keywords

    Austria; WIFO forecast; WIFO Economic Outlook; trend output; structual budget balance;
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