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Pension Reform and the Fiscal Policy Stance

Author

Listed:
  • Mr. Philip R. Gerson
  • Mr. George A Mackenzie
  • Mr. Peter S. Heller
  • Mr. Alfredo Cuevas

Abstract

The increased budget deficit caused by the privatization of a public pension plan does not imply a relaxation of the stance of fiscal policy. The reform's impact on the fiscal stance and national saving depends primarily on its effect on the sum of explicit and implicit public debt and on the post-reform payroll tax and private system contribution rates. However, the precise impact of reform also depends on such influences as the relationship between the rates of interest on implicit and explicit public debt. There may be circumstances in which pension privatization, if not offset by fiscal consolidation, will loosen the fiscal stance.

Suggested Citation

  • Mr. Philip R. Gerson & Mr. George A Mackenzie & Mr. Peter S. Heller & Mr. Alfredo Cuevas, 2001. "Pension Reform and the Fiscal Policy Stance," IMF Working Papers 2001/214, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2001/214
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    References listed on IDEAS

    as
    1. Mr. Peter S. Heller, 1998. "Rethinking Public Pension Reform Initiatives," IMF Working Papers 1998/061, International Monetary Fund.
    2. Murphy, Kevin M & Welch, Finis, 1998. "Perspectives on the Social Security Crisis and Proposed Solutions," American Economic Review, American Economic Association, vol. 88(2), pages 142-150, May.
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    Cited by:

    1. David Robalino, 2005. "Pensions in the Middle East and North Africa: Time for Change," World Bank Publications - Books, The World Bank Group, number 7427.
    2. Ondøej Schneider, 2009. "Reforming Pensions in Europe: Economic Fundamentals and Political Factors," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 59(4), pages 292-308, Oktober.
    3. Juan Manuel Lima & Mr. Johannes Wiegand & Enrique Montes & Carlos Varela, 2006. "Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities in Colombia, 1996-2003," IMF Working Papers 2006/005, International Monetary Fund.
    4. Federico Escobar & Osvaldo Nina, 2004. "Pension Reform in Bolivia: A Review of Approach and Experience," Development Research Working Paper Series 04/2004, Institute for Advanced Development Studies.

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