Description

Asset booms and sectoral changes can distort traditional estimates of structural fiscal revenue, and could lead to serious fiscal policy errors. This paper extends the estimation of structural revenues to take account of asset prices and sectoral changes, and applies this to the case of Ireland, where a property bust has revealed a large hole in the public finances. It is shown that excluding these factors led to a substantial bias in the estimation of structural revenues, and the structural balance prior to the crisis was much larger than earlier estimated.

Taxonomy

Asset prices , Business cycles , Capital markets , Economic development , Economic policy , Financial institutions and markets , Fiscal policy

More publications in this series: Working Papers

More publications by: Daniel Kanda