Bosnia and Herzegovina : Calculation of Cyclically Adjusted Budget Balance and Assessment of Fiscal Policy Stance
What is the real character of fiscal policy? Is it expansionary or restrictive? Is it pro-cyclical or does it have stabilization effects? Policymakers and economic analysts need to be able to ascertain fiscal policy effort. As the actual budget...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/339101531463533488/Bosnia-and-Herzegovina-calculation-of-cyclically-adjusted-budget-balance-and-assessment-of-fiscal-policy-stance http://hdl.handle.net/10986/30117 |
| Summary: | What is the real character of fiscal
policy? Is it expansionary or restrictive? Is it
pro-cyclical or does it have stabilization effects?
Policymakers and economic analysts need to be able to
ascertain fiscal policy effort. As the actual budget
balances are affected both by cyclical factors and
structural measures, they may not, in general, be very
useful when seeking to assess the stance of the fiscal
policy. To understand the true nature of fiscal policy, it
is therefore fundamental to remove cyclical effects of
general government budget balances. The cyclically-adjusted
budget balance (CAB) indicator plays this role in the fiscal
surveillance framework as a means of analyzing the fiscal
situation and changes in policy that result from the
intentional actions of the government. This paper, for the
first time, provides detailed calculations of the
cyclically-adjusted budget balances in BiH, following a
commonly agreed method by the European Commission and
assesses the character of the fiscal policy in BiH from 2008
to 2019. The analysis showed that in earlier years BiH had
led stabilizing expansionary fiscal policy, while in more
recent years the fiscal policy was mostly restrictive and procyclical |
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