scholarly journals Population Ageing and Fiscal Sustainability in Finland: A Stochastic Analysis

2008 ◽  
Author(s):  
Jukka Lassila ◽  
Tarmo Valkonen
Keyword(s):  
Stochastic Analysis ◽  
Population Ageing ◽  
Fiscal Sustainability

scholarly journals A Framework for Assessing the Costs of Pension Reform Reversals

2020 ◽  
Vol 20 (132) ◽  
Author(s):  
Daniel Baksa ◽  
Zsuzsa Munkacsi ◽  
Carolin Nerlich
Keyword(s):  
Overlapping Generations ◽  
Pension Reform ◽  
Population Ageing ◽  
Fiscal Sustainability ◽  
Specific Information ◽  
Pension Reforms ◽  
The Public ◽  
Dynamic General Equilibrium Model ◽  
Macroeconomic Impact ◽  
Country Specific

Several European countries are currently considering reversing parts of their pension reforms that were adopted previously to improve sustainability. In this paper we present a framework that allows us to quantify the macroeconomic and fiscal costs of such reversals. We thereby integrate the country-specific information from the latest Ageing Report into a dynamic general equilibrium model with overlapping generations. Focusing on Germany and Slovakia as country cases, our model replicates the Ageing Report’s pension expenditure projections very well. We calculate the macroeconomic impact of first the additional pension reforms needed to contain the public debt pressures arising from population ageing and second the costs of reform reversals. Our model results show that undoing past pension reforms would generate substantial adverse macroeconomic costs and could pose challenges for fiscal sustainability.

scholarly journals Assessing fiscal sustainability in Swaziland

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Welcome N. Nxumalo ◽  
Nomvuyo F. Hlophe
Keyword(s):  
Fiscal Policy ◽  
South African ◽  
Stochastic Analysis ◽  
Sustainability Indicators ◽  
Fiscal Sustainability ◽  
Fiscal Crisis ◽  
Customs Union ◽  
Medium Term ◽  
Corrective Measures ◽  
Long Run

Background: Understanding and assessing fiscal sustainability is essential in ensuring financial and macro-economic stability. Fiscal sustainability has emerged as an important subject for Swaziland given the increasingly volatile government revenues especially those coming through the South African Customs Union (SACU), which threw the country into a severe fiscal crisis between 2010 and 2012, as well as the pressures on increased government spending in the post-fiscal crisis era. Aim: This article primarily focuses on studying whether Swaziland’s fiscal policy remains on a sustainable path or whether corrective measures would be required. Setting: Study focuses on Swaziland, a small open economy that is vulnerable to external shocks. The country also relies heavily on South African Customs Union (SACU) revenues. Methods: The study employs a broad approach to assessing fiscal sustainability in Swaziland covering both deterministic and stochastic analysis. On the deterministic analysis, the article studies the evolution of debt given macro-economic variables and further estimates fiscal sustainability indicators such as the primary gap and tax-gap. From a stochastic analysis, the article uses the Trehan and Walsh Methodology as well as Hakkio and Rush Methodology. Results: Fiscal sustainability indicators reflected that the country is on an unsustainable path with a primary gap and tax-gap of about 7% of gross domestic product (GDP) that has to be corrected. The econometric results also portray an evidence of ‘weak-form’ sustainability in the long-run. This is because public expenditures are rising at a faster pace than revenues thereby rendering government deficits unsustainable in the medium term. The econometric results also suggest a tax-spend hypothesis in the long-run, while short-run developments point to a spend-tax hypothesis. In both instances the correction measure is cutting expenditure, mainly recurrent expenditure. Conclusion: The study recommends corrective measures (mainly cuts in government expenditure) for fiscal policy to be brought back into a sustainable path without which a fiscal crisis is imminent. The recommendations are mainly based on the fiscal sustainability indicators as they are more forward looking for the short to medium term. The article suggests fiscal rules based on these indicators.

scholarly journals Ageing population, physical activity, and long-term fiscal sustainability: Evidence from Poland

2020 ◽  
Author(s):  
Małgorzata Kalbarczyk ◽  
Joanna Mackiewicz-Łyziak
Keyword(s):  
Physical Activity ◽  
Older People ◽  
Long Term Care ◽  
Public Spending ◽  
Population Ageing ◽  
Fiscal Sustainability ◽  
Ageing Population ◽  
Term Care ◽  
Baseline Case

Our study estimates potential fiscal savings from increased physical activity among older people. This is the first study directly assessing the possible impact of higher physical activity on long-term fiscal sustainability. The study focuses on Poland, where ageing costs are mostly associated with an increase in public spending on healthcare and long-term care. Our results suggest that physical activity has the potential to significantly decrease healthcare and long-term care expenditures. Converting these results into long-term fiscal sustainability, we calculate the S2 indicator, used by the European Commission for the assessment of fiscal sustainability in the long horizon. The long-term component of the indicator, related to ageing costs, is lower by almost 0.7 in comparison with the baseline case, 0.5 of which can be attributed to the reduction in long-term care and 0.2 to the reduction in healthcare. Our results confirm that increased physical activity among older people may lead to a reduction in expenditures related to population ageing and may significantly improve long-term fiscal sustainability.

Russia’s fiscal stimulus and fiscal sustainability

2013 ◽  
pp. 90-108 ◽  
Author(s):  
N. Akindinova ◽  
N. Kondrashov ◽  
A. Cherniavsky
Keyword(s):  
Government Spending ◽  
Public Expenditure ◽  
Oil Prices ◽  
Fiscal Sustainability ◽  
Macroeconomic Model ◽  
Sharp Drop ◽  
Fiscal Stimulus ◽  
Fiscal Multipliers ◽  
Russian Economy ◽  
The Impact

This study examines the impact of public expenditure on economic growth in Russia. Fiscal multipliers for various items of government spending are calculated by means of our macroeconomic model of the Russian economy. Resources for fiscal stimulus and optimization are analyzed. In this study we assess Russia’s fiscal sustainability in conditions of various levels of oil prices. We conclude that fiscal stimulus is ineffective in Russia, while fiscal sustainability in conditions of a sharp drop in oil prices is relatively low.

Fiscal rules: Excessive limitation or indispensable instrument of fiscal sustainability?

2016 ◽  
pp. 5-29 ◽  
Author(s):  
E. Gurvich ◽  
I. Sokolov
Keyword(s):  
Historical Data ◽  
Federal Budget ◽  
Fiscal Sustainability ◽  
Fiscal Rules ◽  
External Shocks ◽  
Base Price ◽  
Depth Analysis ◽  
Fiscal Balance ◽  
Lower Size ◽  
Budget Expenditure

In-depth analysis of international and Russia’s experiences with implementing fiscal rules is presented. Theoretical and empirical evidences are suggested in favor of retaining the present fiscal rules with some modifications aimed at ensuring: a) a relatively stable level of federal budget expenditure with guaranteed full execution of all commitments; b) countercyclical fiscal policy, based on flexibleand proper reaction to revenue changes; and c) robustness of fiscal rules to internal and external shocks. The main new features suggested include modified calculation of the oil base price, different measurement of cyclical fiscal revenues, lower size of structural fiscal balance, and thorough specification of sources for each item of the balance. The modified rules envisage increased flexibility by relaxing to a pre-set extent and for a pre-set time spending limits in response to extreme shocks. The suggested version of fiscal rules has been tested by application to historical data for 2005-2015, and macro projections for 2015-2025.

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