On Structural Budget Balance

In an excellent paper Frances Coppola (@Frances_Coppola) shows that disentangling structural fiscal balance from the budget balance is not an easy task as it relied on not easy to define hypothesis.
Therefore, the question on the importance of the concept is on the table. Can it be useful if its definition can be perceived as fuzzy? May be is it just a way for economists to speak a very specific language that will not be understood by non economist?

Her conclusion
“The aftermath of a severe negative shock is no time to be worrying about “structural” deficits. Better to restore the economy first, by every means available. Dealing with what would be better named the “residual” fiscal deficit is a job for the good times.”

Her article is here http://www.pieria.co.uk/articles/the_myth_of_the_structural_deficit

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s