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The whole elephant: A proposal for integrating cash, accrual, and sustainability-gap accounts

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  • Timothy C. Irwin

Abstract

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, H62 Keywords: Accrual accounts, comprehensive accounts, liabilities, budget deficit

Suggested Citation

  • Timothy C. Irwin, 2015. "The whole elephant: A proposal for integrating cash, accrual, and sustainability-gap accounts," OECD Journal on Budgeting, OECD Publishing, vol. 14(3), pages 1-18.
    • Handle: RePEc:oec:govkaa:5jrw6591hns1
    DOI: 10.1787/budget-14-5jrw6591hns1
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    1. Blejer, Mario I & Cheasty, Adrienne, 1991. "The Measurement of Fiscal Deficits: Analytical and Methodological Issues," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1644-1678, December.
    2. Timothy C. Irwin, 2015. "Defining The Government'S Debt And Deficit," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 711-732, September.
    3. Mr. Timothy C Irwin, 2012. "Some Algebra of Fiscal Transparency: How Accounting Devices Work and How to Reveal Them," IMF Working Papers 2012/228, International Monetary Fund.
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    More about this item

    Keywords

    accrual accounts; comprehensive accounts; liabilities; budget deficit;
    All these keywords.

    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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