1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Accounting for One-off Operations when Assessing Underlying Fiscal Positions

Frequent recourse to large one-off operations in a number of OECD countries has undermined the accuracy of cyclically adjusted fiscal balances as a measure of both the sustainability of public finance and the fiscal stance. This paper first provides detailed information on the nature and amount of these one-offs for 9 OECD countries. The paper then presents a new indicator – the “underlying” fiscal balance – which effectively eliminates the impact of one-offs and cyclical developments. One-offs are derived as the deviations from trend in net capital transfers, i.e. from widely available national account data. This approach provides a consistent treatment of one-offs both across countries and over time, avoiding the potential information biases which could result from an individual identification of one-offs.

English

Keywords: fiscal balances, cyclically-adjusted budget balance
JEL: H30: Public Economics / Fiscal Policies and Behavior of Economic Agents / Fiscal Policies and Behavior of Economic Agents: General; H60: Public Economics / National Budget, Deficit, and Debt / National Budget, Deficit, and Debt: General; E62: Macroeconomics and Monetary Economics / Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook / Fiscal Policy
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