Boosting Fiscal Space

Boosting Fiscal Space

Author: Mr.Jonathan David Ostry

Publisher: International Monetary Fund

Published: 2018-03-14

Total Pages: 47

ISBN-13: 1484330935

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Noting that the aftermath of the global financial crisis has left many advanced economies with very high sovereign debt ratios and some emerging markets with high debt, this report considers whether there are ways to expand fiscal space that do not involve countries paying down debt or promising to do so in the future, to make fiscal consolidation more growth-friendly. It explains that policymakers argue that their fiscal space is limited and that it would be difficult to take advantage of the opportunity of low interest rates to undertake fiscal expansion, and it considers a ways to raise fiscal space that does not require contractionary fiscal policy and whether there is a way to make fiscal consolidation more growth-friendly to produce larger gains in fiscal space. It argues that debt management policies may provide an answer to expanding fiscal space for a given path of primary fiscal balances by reducing the risk that a sovereign may default in bad states and generate a payoff in terms of reduced to real borrowing costs. It describes two debt management policies: issuance of GDP-linked debt and issuance of longer maturity bonds, as opposed to short-term debt. It focuses on the effect of these debt management policies on real borrowing costs and default risk for the sovereign and details the literature on GDP-linked debt and the maturity structure and how the report fills gaps in the literature; how uncertainty affects fiscal space and how debt management can play a role in increasing it, with estimates and simulations of potential gains in fiscal space flowing from debt management; and the sensitivity of the findings to underlying assumptions and policy implications.


Fiscal Space

Fiscal Space

Author: Rathin Roy

Publisher: Earthscan

Published: 2009

Total Pages: 522

ISBN-13: 1844075877

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First Published in 2009. Routledge is an imprint of Taylor & Francis, an informa company.


Central Banks as Fiscal Players

Central Banks as Fiscal Players

Author: Willem Buiter

Publisher: Cambridge University Press

Published: 2020-11-12

Total Pages: 229

ISBN-13: 1108842828

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It is well known that the balance sheets of most major central banks significantly expanded in the aftermath of the financial crisis of 2007-2011, but the consequences of this expansion are not well understood. This book develops a unified framework to explain how and why central bank balance sheets have expanded and what this shift means for fiscal and monetary policy. Buiter addresses a number of key issues in monetary economics and public finance, including how helicopter money works, when modern monetary theory makes sense, why the Eurosystem has a potentially fatal design flaw, why the fiscal theory of the price level is a fallacy and how to escape from the zero lower bound.


Assessing Fiscal Space

Assessing Fiscal Space

Author: International Monetary Fund. Strategy, Policy, & Review Department

Publisher: International Monetary Fund

Published: 2018-06-15

Total Pages: 66

ISBN-13: 1498309275

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This paper reviews the experience with the fiscal space assessment framework that was piloted during 2017–18. In 2016, staff proposed an operational definition of fiscal space and a new four-stage framework for its assessment. These were discussed informally by the Board in June, and a Board paper “Assessing Fiscal Space: An Initial Consistent Set of Considerations” incorporating Directors’ views was published in December. Fiscal space was narrowly defined as the room for undertaking discretionary fiscal policy relative to existing plans without endangering market access and debt sustainability. The framework was developed in response to the need to provide a more systematic approach to assessing fiscal space in the Fund’s surveillance. It was designed as a tool to inform the availability of fiscal space over a 3 to 4 year horizon for discretionary action, as opposed to the optimality of its use. Indeed, it was stressed that the availability of space does not necessarily mean that it should be used or should not be further expanded. The framework was piloted in the Article IV consultations of 34 advanced economies and emerging markets, comprising almost 80 percent of global GDP in PPP terms.


Understanding Fiscal Space

Understanding Fiscal Space

Author: Mr.Peter S. Heller

Publisher: International Monetary Fund

Published: 2005-03-01

Total Pages: 19

ISBN-13: 1451975635

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With new initiatives to provide low income countries with external assistance in support of the Millennium Development Goals (MDGs), donors and NGOs are seeking to understand whether "fiscal space" can be provided in the context of IMF-supported programs to support these initiatives. This paper defines the concept of fiscal space and its link to fiscal sustainability, describes alternative ways in which fiscal space can be created, and notes how the IMF can support appropriate efforts to create fiscal space. The paper underscores that the issues that arise in creating fiscal space are not novel, but have always confronted governments in judging whether there is scope for additional expenditure.


Age Related Pension Expenditure and Fiscal Space

Age Related Pension Expenditure and Fiscal Space

Author: Mukul G. Asher

Publisher: Routledge

Published: 2016-02-22

Total Pages: 207

ISBN-13: 1317371593

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This book explores the linkages between age-related pension expenditures and the fiscal space needed to fund them, as well as to organize the mix of financing methods with different risk-sharing arrangements. After critically assessing the existing models projecting age-related expenditure in the literature, the book focuses on the case studies of these inter-linkages in four highly-populated East Asian countries, namely China, Indonesia, India, and Japan. Nearly two- fifths of the global population live in these countries. Therefore, how these inter-linkages manifest themselves and the initiatives in these countries for finding fiscal space will have an impact on how the ageing issues are addressed globally. This book does several distinguishing characteristics, including exploration of inter-linkages between age-related expenditure and fiscal space, and application of country-specific methods to explore these linkages, rather than relying standard macroeconomic model. In the process, the studies also bring out the limitations of standardized model used in the literatures. Scholars and policy makers interested in the subject will definitely find the book of valuable use.


Coordination of Monetary and Fiscal Policies

Coordination of Monetary and Fiscal Policies

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 1998-03-01

Total Pages: 33

ISBN-13: 1451844239

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Recently, monetary authorities have increasingly focused on implementing policies to ensure price stability and strengthen central bank independence. Simultaneously, in the fiscal area, market development has allowed public debt managers to focus more on cost minimization. This “divorce” of monetary and debt management functions in no way lessens the need for effective coordination of monetary and fiscal policy if overall economic performance is to be optimized and maintained in the long term. This paper analyzes these issues based on a review of the relevant literature and of country experiences from an institutional and operational perspective.


The Fiscal Dimension of HIV/AIDS in Botswana, South Africa, Swaziland, and Uganda

The Fiscal Dimension of HIV/AIDS in Botswana, South Africa, Swaziland, and Uganda

Author: Elizabeth Lule

Publisher: World Bank Publications

Published: 2011-11-17

Total Pages: 313

ISBN-13: 082138807X

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HIV/AIDS continues to take a tremendous toll on the populations of many countries, especially in sub-Saharan Africa. In some countries with high HIV prevalence rates, life expectancy has declined by more than a decade and in a few cases by more than two decades. Even in countries with HIV prevalence of around 5 percent (close to the average for sub-Saharan Africa), the epidemic can reverse gains in life expectancy and other health outcomes achieved over one or two decades. This volume highlights work conducted under the umbrella of a World Bank work program on “The Fiscal Dimension of HIV/AIDS,” including country studies on Botswana, South Africa, Swaziland, and Uganda. It covers four aspects of the fiscal dimensions of HIV/AIDS: First, it aims for a comprehensive analysis of the fiscal costs of HIV/AIDS, with a wider scope than a costing analysis focusing on only the policy response to HIV/AIDS. Second, it embeds the analysis of HIV/AIDS costs in a discussion of the fiscal context, and interprets these costs as a quasi-liability, not a debt de jure, but a political and fiscal commitment that binds fiscal resources in the future and cannot easily be changed, and very similar to a pension obligation or certain social grants or services. Third, it develops tools to assess the (fiscal dimensions of) trade-offs between HIV/AIDS policies and measures that take into account the persistence of these spending commitments. Fourth, most of the fiscal costs of HIV/AIDS are ultimately caused by new infections, and this study estimates the fiscal resources committed (or saved) by an additional (or prevented) HIV infection. Building on these estimates, the analysis here is able to assess the evolving fiscal burden of HIV/AIDS over time.


Tobacco Taxes

Tobacco Taxes

Author: Asian Development Bank

Publisher: Asian Development Bank

Published: 2012-11-01

Total Pages: 59

ISBN-13: 9290928913

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This study analyzes the potential fiscal, health, and poverty impacts of increasing cigarette taxes in five countries---the People's Republic of China, India, the Philippines, Thailand, and Viet Nam. For each of these countries, increasing taxes on cigarettes would result in substantially fewer long-term smokers and a reduction in premature deaths from tobacco-related diseases, while increasing tax revenues. The poorest groups in each country only bear a small part of the extra tax burdens, but do reap a substantial proportion of the health benefits of reduced smoking.