Quantitative Approaches to Fiscal Sustainability Analysis : A New World Bank Tool Applied to Turkey
Fiscal sustainability analysis (FSA) is an important component of macroeconomic analysis. The authors review various quantitative approaches to FSA with a major objective to bring these approaches together and to present a user-friendly tool for FS...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/03/7465195/quantitative-approaches-fiscal-sustainability-analysis-new-world-bank-tool-applied-turkey http://hdl.handle.net/10986/7249 |
| Summary: | Fiscal sustainability analysis (FSA) is
an important component of macroeconomic analysis. The
authors review various quantitative approaches to FSA with a
major objective to bring these approaches together and to
present a user-friendly tool for FSA that reflects modern
developments. They combine a dynamic simulations approach
with a simplified version of the steady-state consistency
approach. They also incorporate two different methods to
deal with uncertainty: user-defined stress tests and
stochastic simulations. The tool goes further by evaluating
the required fiscal adjustment as a consequence of the
stochastic realizations of the exogenous variables.
Furthermore, the fiscal sustainability tool incorporates an
endogenous debt feedback rule for the primary surplus, a
fiscal policy reaction function. Besides outlining the
theoretical framework, the authors also present a case study
for Turkey. |
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