Accounting for One-off Operations when Assessing Underlying Fiscal Positions [E-Book] / Isabelle Joumard ... [et al]
Joumard, Isabelle.
Minegishi, Makoto. / André, Christophe. / Nicq, Chantal. / Price, Robert.
Paris : OECD Publishing, 2008
34 p. ; 21 x 29.7cm.
OECD Economics Department Working Papers ; 642
Full Text
Frequent recourse to large one-off operations in a number of OECD countries has undermined the accuracy of cyclically adjusted fiscal balances as a measure of both the sustainability of public finance and the fiscal stance. This paper first provides detailed information on the nature and amount of these one-offs for 9 OECD countries. The paper then presents a new indicator – the "underlying" fiscal balance – which effectively eliminates the impact of one-offs and cyclical developments. One-offs are derived as the deviations from trend in net capital transfers, i.e. from widely available national account data. This approach provides a consistent treatment of one-offs both across countries and over time, avoiding the potential information biases which could result from an individual identification of one-offs.