The whole elephant

         Although the budget deficit is much discussed in political debate and economic research, there is no agreement on how it should be measured. There are at least four options, which can be called the cash deficit, the financial deficit, the full-accrual deficit, and the comprehensive deficit. Each is informative, but each has problems of relevance or reliability. Some are more vulnerable to manipulation involving assets and liabilities that are unrecognised in the underlying accounting, others to manipulation involving the mismeasurement of recognised assets and liabilities. Governments should publish all four in a form that reveals their interrelationships.         JEL classification: H6, H61, H62Keywords: Accrual accounts, comprehensive accounts, liabilities, budget deficit      

OECD Journal on Budgeting, Volume 2014 Issue 3

The whole elephant

A proposal for integrating cash, accrual, and sustainability-gap accounts