A Framework for Assessing Fiscal Sustainability and External Viability, with An Application to India [electronic resource] Parker, Karen Elizabeth.

Parker, Karen Elizabeth.
Washington, D.C. : International Monetary Fund, 1993.
IMF eLibrary
IMF Working Papers; Working Paper No. 93/78.
IMF Working Papers; Working Paper No. 93/78
Government document
1 online resource (44 p.)
Local subjects:
Account deficits.
Accumulation of arrears.
Balance of payments.
Budget constraint.
Central bank.
Crisis countries.
Current account.
Current account balance.
Current account deficit.
Current account deficits.
Current account surplus.
Current account surpluses.
Debt burden.
Debt crisis.
Debt policy.
Debt ratio.
Debt reduction.
Debt rescheduling.
Debt service.
Debt service capacity.
Debt service obligations.
Debt servicing.
Debt stock.
Debt stocks.
Debt strategy.
Debt-service obligations.
Debtor countries.
Deficit financing.
Domestic borrowing.
Domestic debt.
Domestic public debt.
Domestic savings.
Expansionary fiscal.
Expansionary fiscal policies.
Expansionary fiscal policy.
External borrowing.
External debt.
External financing.
External obligations.
Fiscal accounts.
Fiscal adjustment.
Fiscal adjustments.
Fiscal balance.
Fiscal balance sheet.
Fiscal consolidation.
Fiscal correction.
Fiscal deficit.
Fiscal deficits.
Fiscal difficulties.
Fiscal discipline.
Fiscal policies.
Fiscal policy.
Fiscal retrenchment.
Fiscal rules.
Fiscal scenarios.
Fiscal situation.
Fiscal stance.
Fiscal strategies.
Fiscal strategy.
Fiscal sustainability.
Foreign borrowing.
Foreign capital.
Foreign debt.
Government budget.
Government debt.
Government deficits.
Government expenditure.
Government solvency.
Government spending.
Heavily indebted countries.
Increase in debt service.
Indebted countries.
Long-term debt.
Primary deficit.
Private credit.
Private debt.
Public borrowing.
Public debt.
Public finance.
Public finances.
Public sector debt.
Public spending.
Reserve accumulation.
Reserve bank.
Sovereign debt.
Spending cuts.
Structural adjustment.
Sustainable fiscal deficit.
Sustainable fiscal policy.
Tax increases.
Tax reform.
This paper presents a simple macroeconomic simulation model which can be used to evaluate alternative fiscal strategies and their implications for external viability. It attempts to bridge the gap between the literature on fiscal sustainability and the demands of operational work. The framework, developed in a spreadsheet format, generates estimates of public spending compatible with identified targets for growth, inflation and domestic and foreign borrowing. The difference between the spending path consistent with these targets and that based on current policies is the fiscal adjustment required to meet the authorities’ macroeconomic objectives. Alternatively, the framework can be used to assess the implications for inflation, interest rates and public indebtendess of a given spending path. Finally, one can analyze the impact of financial reform on fiscal and external performance. The model is applied to India to illustrate the types of simulations that may be conducted.
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Kastner, Steffen.
Parker, Karen Elizabeth.
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