Fiscal Transparency and the Performance of Government Financial Assets


The aftermath of the 2008 financial crisis highlighted the need for significant fiscal adjustments in many advanced economies. Lessons from the crisis have underscored the importance of compiling and disseminating more comprehensive macroeconomic statistics in order to achieve more accurate forecasting and better policy advice, especially for the public and financial sectors (IMF, 2012). While gross debt and surplus/deficits are generic ‘go to’ measures for assessing a government’s fiscal performance, the integrated relationship between these two concepts has become an area of greater scrutiny in recent literature (Von Hagen and Wolf, 2006; Campos, Jaimovich, and Panizza, 2006; Weber, 2012; Alt, Lassen, and Wehner, 2012; Eurostat, 2012; Seiferling, 2013). Emphasis is being placed on changes in net worth and balance sheet analysis building on Blejer and Cheastey (1991), Easterly, de Haan and Gali, (1999), and Milesi-Ferretti and Moriyama (2006). Some find a significant negative correlation between ‘stock-flow’ residuals, and fiscal transparency.

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