NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Measuring Aspects of Fiscal and Financial Policy

Willem H. Buiter

NBER Working Paper No. 1332
Issued in April 1984
NBER Program(s):   ITI   IFM

The paper develops a forward-looking comprehensive accounting framework for the public sector.By integrating the public sector budget constraint forward in time the government's present value budget constraint (PVBC) is obtained. In addition to the familiar financial assets and liabilities, comprehensive public sector networth contains the following items: the value of the public sector capital stock; the value of public sector property rights in landand natural resources; the present value of future seigniorage, the present value of future taxes net of transfers and subsidies and the present value of future planned public sector capital formation, privatization or nationalization programmes. From the "stock" PVBC a number of different "flow" deficit concepts are derived; each one emphasizes a different aspect of the"sustainability" of current and/or prospective fiscal and financial plans. Together they provide a framework for organizing facts and plans about fiscal, financial and monetary policy and for evaluating the consistency of spending and revenue projections or scenarios,public sector debt objectives and monetary targets.

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Document Object Identifier (DOI): 10.3386/w1332

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