OECD Journal on Budgeting
The OECD Journal on Budgeting is published three times per year. It draws on the best of the recent work of the OECD Committee of Senior Budget Officials (SBO), as well as special contributions from finance ministries, academics and experts in the field and makes it available to a wider community in an accessible format. The journal provides insight on leading-edge institutional arrangements, systems and instruments for the allocation and management of resources in the public sector.
Also available in: French
- 3 times a year
- ISSN: 16812336 (online)
- https://doi.org/10.1787/16812336
Illuminating budgetary risks
The role of stress testing
The increased vulnerability of government finances in many countries underlines the importance of public risk management. We apply a specific risk management tool – stress testing – to public finances. After presenting a general framework for stress testing government finances, we illustrate its application for the case of the Netherlands. Our analysis indicates that high levels of contingent liabilities call for sufficient shock absorption capacity in public finances.
JEL classification: E62, H63
Keywords: Fiscal policy, public debt, stress test, risk management, budgetary sensitivity, implicit and explicit guarantees, Netherlands
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