European Parliament Library

Fiscal Transparency and the Performance of Government Financial Assets, Mike Seiferling, Shamsuddin Tareq

Stock-flow adjustments are typically measured as the difference between changes in gross debt and deficits. These are interpreted as a proxy for unexplained fiscal discrepancies, and often associated with a lack of fiscal transparency. However, such measures fail to capture the role of financial assets and valuation changes and therefore do not correctly predict fiscal transparency. The purpose of this paper is to provide a more detailed exposition of stock-flow residuals and the relationship with fiscal transparency, highlighting government acquisition of equities and investment fund shares and their performance in secondary markets. The results suggest that the performance of government equity portfolios correlates with fiscal transparency to the extent that fully transparent governments are expected to generate between 6 and 8 percent higher returns on their equity portfolios than others. These findings suggest that the performance of government assets may be a promising area for future research of fiscal transparency and stock-flow residuals
Table Of Contents
Cover; Abstract; Contents; I. Introduction; II. An Overview of the Literature; III. Decomposing the Stock-Flow Residual; A. Debt and Deficits; Figures; 1. General Government Fiscal Balances and Changes in Gross Debt; B. Transactions in Financial Assets; 2. General Government Flows and Changes in Net Financial Worth; Tables; 1. Pre- and Post-Crisis Net Transactions in Financial Assets by Instrument; 3. Average Transactions in Select Financial Assets; C. Other Economic Flows (Volume and Valuation Changes); 2. Pre- and Post-Crisis Other Economic Flows in Financial Assets by Instrument
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (26 p.)
Specific Material Designation
Form Of Item

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