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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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    1. Sinem Kilic Celik & M.Ayhan Kose & Franziska L. Ohnsorge, 2020. "Subdued potential growth: Sources and remedies," CAMA Working Papers 2020-24, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Matt Andrews & Lant Pritchett & Michael Woolcock, 2015. "Doing Problem Driven Work," CID Working Papers 307, Center for International Development at Harvard University.
    3. M. Ayhan Kose & Franziska Ohnsorge, 2023. "Slowing Growth: More Than a Rough Patch," CAMA Working Papers 2023-23, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    4. 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.
    5. Sinem Kilic Celik & M. Ayhan Kose & Franziska Ohnsorge, 2023. "Potential Growth Prospects: Risks, Rewards and Policies," CAMA Working Papers 2023-19, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    6. 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.
    7. Andrews, Matt & Pritchett, Lant & Woolcock, Michael, 2017. "Building State Capability: Evidence, Analysis, Action," OUP Catalogue, Oxford University Press, number 9780198747482.
    8. 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.
    9. Tomomi Miyazaki & Kazuki Onji, 2017. "The Sustainability of Japan's Government Debt: A Review," Discussion Papers 1716, Graduate School of Economics, Kobe University.
    10. 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; Modern Monetary Theory
    • 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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