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Cyclically Adjusted Balance of Latvia's General Government Consolidated Budget

Author

Listed:
  • Sigita Grundiza

    (Bank of Latvia)

  • Dainis Stikuts

    (Bank of Latvia)

  • Olegs Tkacevs

    (Bank of Latvia)

Abstract
This study estimates cyclically adjusted balances of Latvia's general government consolidated budget using methodologies of the ESCB and OECD and assesses the consistency of the implemented fiscal policy with the EU fiscal policy framework. During the period of rapid economic growth the Latvian government pursued fiscal expansion instead of ensuring budgetary consolidation in cyclically adjusted terms. Fiscal policy of the Latvian government has been inconsistent with the requirements of the Stability and Growth Pact and has exerted an additional pressure on consumer prices and the current account.

Suggested Citation

  • Sigita Grundiza & Dainis Stikuts & Olegs Tkacevs, 2005. "Cyclically Adjusted Balance of Latvia's General Government Consolidated Budget," Working Papers 2005/05, Latvijas Banka.
    • Handle: RePEc:ltv:wpaper:200505
    as

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    File URL: https://www.bank.lv/public_files/images/img_lb/izdevumi/english/citas/Balance_of_Consolidated_Budget.pdf
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    File URL: https://www.macroeconomics.lv/sites/default/files/balance_of_consolidated_budget.pdf
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    References listed on IDEAS

    as
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    3. Rasmus Kattai & Alvar Kangur & Martti Randveer, 2003. "Automatic fiscal stabilisers in Estonia: the impact of economic fluctatios on general government budget balance," Bank of Estonia Working Papers 2003-11, Bank of Estonia, revised 10 Oct 2003.
    4. Marianne Baxter & Robert G. King, 1999. "Measuring Business Cycles: Approximate Band-Pass Filters For Economic Time Series," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 575-593, November.
    5. Bouthevillain, C. & Van Den Dool, G. & Langenus, G. & Mohr, M. & Momigliano, S. & Tujula, M. & De Cos, P.H. & Cour-Thimann, Philippine, 2001. "Cyclically Adjusted Budget Balances: an Alternative Approach," Papers 77, Quebec a Montreal - Recherche en gestion.
    6. Paul van den Noord, 2000. "The Size and Role of Automatic Fiscal Stabilizers in the 1990s and Beyond," OECD Economics Department Working Papers 230, OECD Publishing.
    7. Dainis Stikuts, 2003. "Measuring Output Gap in Latvia," Working Papers 2003/02, Latvijas Banka.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    cyclically adjusted budget balance; Stability and Growth Pact; pro-cyclical fiscal policy; budgetary elasticity;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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