Finland’s Public Sector Balance Sheet: A Novel Approach to Analysis of Public Finance
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Summary:
We construct a comprehensive public sector balance sheet for Finland from 2000 to 2016 by complementing general government statistics with data on public corporations and public pensions. We show that exposure to valuation changes in equity markets through asset holdings and increases in pension liabilities relative to GDP amplify crisis impacts on public finances. We expand the balance sheet by including present value estimates of future fiscal flows; this allows us to perform fiscal stress tests and policy experiments. These analyses suggest that Finland’s public finances will remain sound provided ongoing reform and consolidation efforts to address aging pressures are implemented as planned.
Series:
Working Paper No. 2018/078
Subject:
Economic sectors Expenditure Financial statements Fiscal policy Fiscal stance Labor Pension spending Pensions Public financial management (PFM) Public sector
English
Publication Date:
April 6, 2018
ISBN/ISSN:
9781484349885/1018-5941
Stock No:
WPIEA2018078
Pages:
44
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