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|c 5.00 USD
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|z 9781513538877
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|a 1934-7685
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|a BD-DhAAL
|c BD-DhAAL
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|a International Monetary Fund.
|b European Dept.
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|a Belgium :
|b Selected Issues.
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|a Washington, D.C. :
|b International Monetary Fund,
|c 2020.
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|a 1 online resource (15 pages)
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|a IMF Staff Country Reports
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|a <strong>Off-Campus Access:</strong> No User ID or Password Required
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|a <strong>On-Campus Access:</strong> No User ID or Password Required
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|a Electronic access restricted to authorized BRAC University faculty, staff and students
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|a This Selected Issues paper analyzes Belgium's fiscal stance using a structural stochastic model. This note uses a theoretical model that explicitly accounts for the trade-offs between the short-term cost of fiscal tightening and the long-term gains associated with higher fiscal buffers. This paper shows that once the current crisis is over, rebuilding fiscal buffers is essential to helping Belgium confront the next shock from a stronger fiscal position. Overall, this illustrates a major motivation for a credible medium-term fiscal consolidation strategy. When a government reduces debt, it increases its capacity to react to shocks later. This entails a short-term cost that is, in the case of Belgium, worth the effort as this capacity to smooth future shocks increases future welfare. In addition, a large capacity to react with fiscal policy reduces the risk of long-lasting effects of a large crisis. Historical data show that in the past, the Belgium government's reaction to the cycle was limited to a single event. By contrast, if Belgium could firmly anchor public debt on a downward path, future governments would be able to offset downturns while keeping debt sustainability concerns under control.
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|a Mode of access: Internet
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|a IMF Staff Country Reports; Country Report ;
|v No. 2020/092
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|z Full text available on IMF
|u http://elibrary.imf.org/view/journals/002/2020/092/002.2020.issue-092-en.xml
|z IMF e-Library
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