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Fiscal and quasi - fiscal deficits, nominal and real : measurement and policy issues

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  • de Rezende Rocha, Roberto
  • Saldanha, Fernando

Abstract

The paper reviews alternative definitions of the non-financialpublic sector deficit. Important points giving rise to different definitions are the problem of foreign exchange losses, the appropriateness of including net government lending to the private sector and the distinction between nominal and real deficits. The paper also introduces alternative definitions of quasi-fiscal deficit, and discusses the same issues in the context of these definitions. Foreign exchange losses and the distinction between nominal and real deficits are discussed in greater detail, since these issues are even more relevant in the case of the central bank. The authors also merge the accounts of the non-financial and financial public sector into a consolidated budget constraint. Then the analysis of fiscal and quasi-fiscal deficits are illustrated through a detailed examination of some stylized cases. Finally, the authors provide a summary of major issues and some conclusions are derived from them.

Suggested Citation

  • de Rezende Rocha, Roberto & Saldanha, Fernando, 1992. "Fiscal and quasi - fiscal deficits, nominal and real : measurement and policy issues," Policy Research Working Paper Series 919, The World Bank.
    • Handle: RePEc:wbk:wbrwps:919
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    References listed on IDEAS

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    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Barro, Robert J, 1989. "The Ricardian Approach to Budget Deficits," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 37-54, Spring.
    3. Rocha, Roberto de Rezende, 1991. "Inflation and stabilization in Yugoslavia," Policy Research Working Paper Series 752, The World Bank.
    4. Teijeiro, Mario O., 1989. "Central bank losses : origins, conceptual issues, and measurement problems," Policy Research Working Paper Series 293, The World Bank.
    5. Eisner, Robert, 1989. "Budget Deficits: Rhetoric and Reality," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 73-93, Spring.
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    1. Ludovit Ódor & Gábor P. Kiss, 2014. "Back to basics – good indicators for good fiscal institutions!," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 13(4), pages 125-151.
    2. Albu, Lucian-Liviu & Pelinescu, Elena, 2000. "Sustainability of public debt: a theoretical and empirical investigation," MPRA Paper 14364, University Library of Munich, Germany.
    3. Barabás, Gyula & Hamecz, István & Neményi, Judit, 1998. "A költségvetés finanszírozási rendszerének átalakítása és az eladósodás megfékezése I. rész. Magyarország tapasztalatai a piacgazdasági átmenet időszakában [Transformation of the financing system o," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 653-674.

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