Contents
List of Tables 5
List of Figures 7
List of Contributors 9
1. Introduction 11
Martin Larch and Joao Nogueira Martins
Part I Long-term Sustainability 15
2. A Further Inquire about the Sustainability of Fiscal Policy in the EU 17
Fernando Ballabriga and Carlos Martinez-Mongay
2.1 Introduction 17
2.2 How to Assess the Sustainability of Fiscal Policy 19
2.3 Government Debt Accounting 21
2.4 Determinants of the Fiscal Primary Surplus 27
2.5 A Closer Look at the Response of Primary Surplus to Debt 40
2.6 Conclusion 45
Appendix 2.A Complementary Tables 47
Appendix 2.B Unit Root Tests 50
Discussion, Fabrizio Balassone 56
3. Unfunded Obligation Measures for EU Countries 59
Jagadeesh Gokhale
3.1 Introduction 59
3.2 Unfunded Obligation Measures 61
3.3 Evaluating Unfunded Obligation Measures 66
3.4 General Considerations of Fiscal and Generational Imbalance
Measures for EU Countries 73
3.5 Fiscal Imbalance Estimates for EU Countries 75
3.6 Conclusion 82
Discussion, Per Eckefeldt 95
Part II The Measurement of the Underlying Budgetary Position and
Discretionary Fiscal Policy 97
4. Budget Balances Decomposed: Tracking Fiscal Policy in Austria 99
Peter Brandner, LeopoldDiebalek and Walpurga Kohler-Toglhofer
4.1 Introduction and Motivation 99
4.2 Related Literature 100
4.3 A Stylised Framework 104
4.4 Results 106
4.5 Conclusions 114
Discussion, Jonas Fischer 115