Uruguay
Selected Issues Paper

This paper estimates cyclically adjusted balances for Uruguay, and discusses methodological and practical implementation issues. In line with standard practice, this paper assumes aggregate fiscal revenue elasticity equal to one. The study also focuses on the cyclically adjusted primary balance, so interest payments are excluded from the analysis. It also estimates Cyclically Adjusted Balances (CABs) for both the consolidated public sector and the general government. The economic development and the credibility of the inflation target are discussed. This study identifies the drivers of the low profitability of Uruguayan banks.

Abstract

This paper estimates cyclically adjusted balances for Uruguay, and discusses methodological and practical implementation issues. In line with standard practice, this paper assumes aggregate fiscal revenue elasticity equal to one. The study also focuses on the cyclically adjusted primary balance, so interest payments are excluded from the analysis. It also estimates Cyclically Adjusted Balances (CABs) for both the consolidated public sector and the general government. The economic development and the credibility of the inflation target are discussed. This study identifies the drivers of the low profitability of Uruguayan banks.

I. Uruguay—Assessing the Structural Fiscal Stance1

A. Introduction

1. While there is consensus that countries should aim at implementing neutral to countercyclical fiscal policy, it is common to see budgets that amplify economic cycles. Such procyclical policies can be seen during downturns—when governments, in particular in emerging market countries, often cut spending or raise taxes to deal with financing constraints—as well as during upswings—when the sense of bonanza can make it hard for policymakers to resist pressures to spend temporary revenues. The absence of precise information regarding the fiscal stance stripped from cyclical and one-off effects contributes to the risk of procyclicality and can even jeopardize long-term sustainability.

2. The global crisis and subsequent rebound in emergent economies has brought a heightened awareness of the importance of assessing fiscal policy against the economic cycle by estimating cyclically adjusted balance (CAB). By separating cyclical factors from discretionary actions, the CAB conveys useful information on whether or not fiscal policy is turning expansionary or contractionary given the stage of the business cycle. Hence, policymakers can have a more accurate indicator of the impact of discretionary fiscal policies on aggregate demand.

3. Experience suggests that countries with fiscal frameworks more firmly based on the tracking of structural balances were better positioned to deploy countercyclical measures during the recent crisis.2 These countries tended to save revenue windfalls during years of booming economic activity, thus building important buffers that could later be used to deal the effects of the crisis to smooth output fluctuations.

4. Uruguay has made efforts to further enhance the fiscal toolkit to assess the appropriateness of its economic policies. The 2005–09 draft budget included a fiscal rule 3 aimed at aligning real spending growth with potential growth. Recent efforts include anchoring the 2010–14 budget in a reduction of public debt to around 40 percent of GDP by 2015 and the creation of an Energy Stabilization Fund to mitigate weather related uncertainties in the electricity state owned company, UTE. The government has also announced plans to produce and publish estimates of the structural fiscal stance.

5. Focusing on structural or cyclically-adjusted fiscal indicators can help reconcile the government’s medium-term debt reduction objective with short-term stabilization objectives. This will make the debt objective more robust and contribute to sustain growth with less volatility that in the past. Furthermore, there are other potential benefits from this fiscal approach. For instance, publishing cyclically-adjusted balances can raise public understanding of fiscal policy constraints—e.g., what are permanent and what are transitory revenues. This in turn can make it easier for policymakers to save revenue windfalls during good years and provide impulse to the economy during bad years.

6. This paper estimates Cyclically Adjusted Balances for Uruguay and discusses methodological and practical implementation issues. Section B introduces the methodology and discusses some particular issues relating to Uruguay. Section C applies the methodology to Uruguay. Section D concludes with some general recommendations amid the positive economic outlook for Uruguay.

7. There are at least three important caveats about the precision of cyclically adjusted balance estimates for uruguay. First, the work on CABs in Uruguay is still at an early stage. Even countries with extensive experience of using CABs revise the estimates as both input data and the framework are improved. For instance, in Chile, the government recently created a high-level commission to recommend reforms that could enhance its decade-old fiscal rule to make it more effective (Box 1).4 Second, Uruguay’s economy has undergone a substantial transformation since the financial crisis in 2002. And there have been important reforms to the fiscal framework, including a tax reform in 2007. These changes make it more challenging to derive precise estimates of the cyclical revenue components. Third, there are several Uruguay specific items that need to be taken into account to get an accurate estimate of both structural revenues and expenditures; this paper discusses some of them, but further work is required. These caveats suggest caution in interpreting the results and that a broad set of indicators should be used.

B. Methodology—Estimating the Cyclically Adjusted Balance (CAB)5, 6

Main Concepts

8. The CAB is a measure of a country’s underlying fiscal position when cyclical components are removed from headline fiscal indicators. Cyclical components, or automatic stabilizers, are those that respond to the economic cycle. By excluding these components, the CAB measures the size of discretionary fiscal policy measures. Changes in the CAB indicate whether fiscal policy is neutral or becoming expansionary or contractionary. Hence, this measure helps assess whether fiscal policy is having a balancing or amplifying effect on fluctuations in economic activity (under the assumption that fiscal multipliers are positive).

9. The cyclically adjusted balance, measured in terms of the primary balance’ is calculated by decomposing the headline fiscal balance, as in equation (1).

OB=CB+CAB-IP=PB-IP (1)

Where OB is the overall fiscal balance; CB is the cyclical primary balance (or the part of the overall balance that reflects the effects of automatic stabilizers associated to the business cycle). The CAB is the cyclical adjusted primary balance, or the part of the overall balance that reflects the authorities’ discretionary policies. PB is the primary balance and IP is the interest bill.

10. The change in the CAB measures the fiscal impulse, or the “discretionary” actions taken by policy makers. A positive fiscal impulse indicates that fiscal policy is procyclical when actual output growth is higher than potential output growth (or the output gap is increasing).

Estimating the Cyclically Adjusted Balance

11. The estimation of the CAB requires an estimate of cyclically-adjusted revenues and expenditures (that is, those purged of mechanic effects driven by the cycle). A standard approach is to calculate them using a measure of the cycle and its effects on their aggregates. For this, two sets of estimates are needed.

  • First, an estimation of potential output—or the level of GDP if prices were fully flexible—and the output gap (the difference between potential and actual output) in order to assess the economic cycle.

  • Second, an estimation of the sensitivity (i.e., the elasticity) of revenues and expenditures to changes in GDP is needed to derive the cyclical components and the long-run level of revenues and expenditures.

Potential Output

12. Potential output—and consequently, the output gap—is typically estimated using different techniques, including filters, econometric models, and a production function. This paper applies several univariate filters and a univariate linear trend for Uruguay. Specifically, it uses the Hodrick-Prescott (HP), Baxter and King (BK), and Christiano-Fitzgerald (CF) filters. It also uses the Piece-Wise Linear Detrending (PWLD) method, which fits a linear trend through the log of actual GDP. One finding of this paper is that the differences in the estimates of trend output for the various methods applied are quite small. The production function, which is a more sophisticated technique was not applied in this paper. A recent study by Magud and Medina (2010) on Chile used a wide range of methods, including filters, and the production function to estimate potential output, and found that the results did not differ much regardless of the applied method. 7 That said, further analysis to estimate the potential output for Uruguay should consider applying the production function as well as a standard vector auto-regression, or the Fund’s Global Projection Model.

13. The output gap between actual output and potential GDP is measured as in equation (2):

GAPYtY*Y*(2)
A01lev3sec3

Where, GAP is the output gap; Yt is actual GDP and Y* is potential GDP.

14. The well-known problem of end-of-period bias of the filters in estimating trend growth can be reduced by including the growth forecasts for 2010–15. One caveat when applying filters is that the estimate of potential growth may be affected by the end of period data. Hence, potential output could be overestimated during a period of high economic activity and underestimated during a recession. To reduce this imprecision the estimates for Uruguay include the projections for the five coming years. Staff projects that the economy will grow by 8¼ percent in 2010, 5 percent in 2011 and four percent thereafter.

15. The results for the four methods are very similar though the PWLD estimates are a bit more volatile. All four methods yield similar average potential output growth for 1985–2009. According to the HP and BK filters, potential growth averaged 3.1 percent over the sample period while the CF’s filter yielded potential growth at an average of 3.2 percent. Despite it shows a little bit more volatility, the PWLD generated a very similar level of potential output with trend growth averaging 3.3 percent 8. This paper uses the HP filter in deriving the CAB but checks the robustness of the results with the other three methods.

Figure 1.
Figure 1.

Real GDP and Trends

(In billions of Uruguayan Pesos)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Source: IMF staff estimates.
Figure 2.
Figure 2.

Real GDP and Trends

(Year-on-year percent change)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Source: IMF staff estimates.
Figure 3.
Figure 3.

Output Gaps

(As percent of potential GDP)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Source: IMF staff estimates.

16. There is one important caveat in potential output estimates for uruguay. The crisis in 2002 caused a sharp fall in output which has been followed by six years of very strong growth. The filters capture a large part of the 2002 drop in actual GDP as a fall in potential GDP followed by strong growth in potential GDP. (The PWLD, oddly, shows a bigger drop in potential than in actual GDP.) While it is likely that the recession and especially the banking crisis caused a fall in potential output, there is a lot of uncertainty about the magnitude. One statistical effect of the crisis and the rapid recovery is that potential growth is estimated at about 6.0 percent in 2010 when using the four methods (with the medium-term projections included to reduce the end-of-period bias for the filters). Few observers believe Uruguay’s long-term potential growth rate to be that high. The staff and the government’s medium-term budget assume long-term growth at four percent a year. Hence, for the current time period, the filters are likely to overestimate potential output and hence underestimate the positive output gap and possibly the fiscal impulse measure.

Elasticity of Revenue and Expenditure

17. In line with standard practice, this paper assumes aggregate fiscal revenue elasticity equal to one. This implies that revenues respond one to one with changes in GDP growth. Nonetheless, to test for the robustness of this assumption, a sensitivity analysis is included assuming aggregated revenues elasticity between 0.9 and 1.25. Given that there is no public information on tax collections associated with commodities, the paper assumes that all changes in revenues arise from changes in the domestic economy.9 Estimates for disaggregated revenues show that elasticities for 2003–09 ranged between 0.6 and 1.9 while the aggregated elasticity is 1.2. However, the major tax reform in 2007 has affected the tax bases and the tax rates. For this reason, the standard assumption of unit elasticity is used.

18. There are at least three complicating issues in estimating revenue elasticities in uruguay. First, the government often resorts to measures to contain price increases of certain sensitive consumer items, and these measures affect fiscal revenues (e.g., delays in adjusting fuel prices affect the net income of the state fuel company, ANCAP). These discretionary measures distort the estimates of cyclically adjusted revenues. Second, changes in tax exemptions, (e.g., for investment promotion), also affect the estimate of the elasticity of revenues, as they raise potential output but do not increase structural revenues accordingly. Third, certain revenues are affected by changes in the exchange rate and this too can distort estimates of elasticities to GDP growth. Future work should seek to capture these effects better.10

19. For expenditure, a reasonable assumption for Uruguay is that all spending has an elasticity equal to zero, except for the unemployment benefits. This means that spending does not automatically react to the business cycle and hence that all changes in spending are structural changes. On the other hand, Uruguay’s unemployment benefits, as is the case in developed countries, change with economic activity. For such spending, assuming elasticity equal to one seems reasonable. There are other aspects on the spending side that affect the structural balance, e.g., the indexation of pensions, and more work is needed to integrate these aspects into the estimates.11

20. This paper focuses on the cyclically adjusted primary balance, so interest payments are excluded from the analysis. Focusing on the primary balance allows a better assessment of year on year discretionary changes in fiscal policy instead of focusing on past decisions by policy makers.

Coverage of the Fiscal Sector

21. The CAB is typically estimated for the consolidated public sector or a more narrow coverage of the public sector, e.g., the general government. In Uruguay, fiscal policy focuses on the consolidated public sector. This is sensible given the important role of state-owned enterprises in Uruguay and the fact that they do matter for aggregate demand and debt sustainability. Furthermore, many government decisions are implemented by state-owned enterprises. Hence, the focus on the consolidated fiscal accounts is in line with best practice.

22. At the same time, including all state-owned enterprise operations can blur CAB estimates, especially when they are prone to be subject to shocks unrelated to the cycle. For instance, the financial position of public company in charge of importing and distributing fuel oil in Uruguay (ANCAP) can change significantly because oil imports are lumpy, but with no effect on aggregate demand. Similarly, the operations of the state-owned electricity company (UTE) are affected by variations in rainfall. Droughts forces UTE to rely more on costly oil to produce electricity (i.e., the drought in 2008 and 2009 cost UTE approximately 1.4 percent of GDP on an annual basis). In a sense, given the objective to smooth electricity tariffs, UTE’s financial position depends on “rain-cycles” rather than GDP cycles. There are probably many other operations or developments in state-owned enterprises that neither depend on the GDP cycle or should be seen as discretionary fiscal policy or that do not affect demand. For these reasons, in many countries, the CAB is estimated for the general government.

23. This paper estimates CABs for both the consolidated public sector and the general government. The general government is defined as the consolidated operations of the central government plus the Social Security Bank (BPS). At the same time, even though public enterprises’ operations in Uruguay are important, the general government represents around 90 percent of the public sector activity and most discretionary policies are undertaken at the general government level. This supports the case to estimate CABs for both the general government and the consolidated public sector to measure the fiscal stance.

Idiosyncratic Factors

24. Idiosyncratic factors relate to corrections for one-off items.12 One-off items are large, non-recurrent budgetary factors, e.g., one-off expenditures or revenues such as a tax forgiveness programs, which temporarily affect the fiscal position but have limited impact on economic activity or have big impact on GDP but little effect on the fiscal position. For Uruguay, one example of such a one-off item relates to the tax exemption granted to a new pulp mill factory in 2008. The construction of the pulp mill factory increased GDP but had no effect on the government’s tax revenue intake.13 The paper tries to control, for this effect by adjusting the tax to GDP ratio more in line with its structural level. For the consolidated public sector, the paper seeks to control for the effects of the droughts on UTE’s financial performance by adjusting its operating surplus to a level closer to its structural position.

C. Estimating the CAB for Uruguay: Results

The Consolidated Public Sector

25. The estimates of the CAB for the consolidated public sector suggest that Uruguay has been implementing somewhat procyclical policies during the majority of the last ten years. This finding is similar to that of other studies.14 This was especially the case prior to the Uruguay’s own financial crisis in 2002 and before the 2009 global economic recession (Figure 4). In contrast, other countries in the region, especially those which have introduced some type of de facto or de jure fiscal rules, e.g., Chile, Peru, and other countries, pursued more countercyclical policies (Box 1 and Western Hemisphere Department’s October 2009 Regional Economic Outlook). In Uruguay, relatively neutral to countercyclical policies were deployed in 2009 contributing to lessen the negative impact of the global crisis. In 2010, as the output gap closed more rapidly than envisaged (as growth surprised on the upside in 2009 and 2010), fiscal policy became somewhat procyclical. Again, these results (their magnitude, not so much their sign) should be treated with caution given the issues surrounding the estimates of potential output and structural revenues and expenditures discussed earlier.

Figure 4.
Figure 4.

Fiscal Impulse, Output Gap, and Change in Output Gap

(Public Sector, in percent of GDP)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Source: IMF staff esti mates.
Table 1.

Uruguay: Consolidated Public Sector Operations

(In percent of GDP)

article image
Source: National authorities and IMF staff estimates

Defined as the change in the primary structural balance (positive means expansionary policies).

26.

27. The fiscal impulse measure is not strongly sensitive to the method used to measure potential output. (Figure 5). Except fot the piece-wise linear detrending in the first part of the sample period, the fiscal impulse measure is very robust regardles of the univariated method used.

Figure 5.
Figure 5.

Fiscal impulse under selected trend filters

(In percent of potential output, unit elasticity)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Source: IMF staff estimates.

28. Furthermore, the overall results are not strongly sensitive to the elasticities used (Figure 6). In the case of revenues, assuming unit elasticity generates a fiscal impulse of 0.5 percent of potential GDP in 2010. An elasticity of 1.25 gives an impulse of 0.7 percent of potential GDP, and an elasticity of 0.9 gives an impulse of 0.4 percent of trend output. In the case of expenditures, given the small size of the unemployment program, the effect of automatic stabilizers is also small irrespective of the elasticity used. Changes in structural spending reflect discretionary policies which have raised current spending on a permanent basis over the last two years.

Figure 6.
Figure 6.

Fiscal impulse under selected elasticities

(in percent of potential output, HP filter)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Source: IMF staff estimates.

The General Government

29. The results are similar when focusing on the general government. A somewhat more procyclical fiscal policy stance is observed at the general government level in the run up to the 2009 economic crisis. (Figure 7 and Table 2). As in the case of the consolidated public sector, sensitivity tests suggest the results are robust. The results are not very sensitive to the method used to estimate potential output (Figure 8). Nor are the results affected greatly by the elasticity applied (Figure 9).

Figure 7.
Figure 7.

Fiscal Impulse, Output Gap, and Change in Output Gap

(Central government, in percent of GDP)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Source: IMF staff estimates.
Table 2.

Uruguay: General Government

(In units as indicated)

article image
Sources: National authorities and IMF staff estimates.

Defined as the change in the primary structural balance (positive means expansionary policies).

Figure 8.
Figure 8.

Fiscal Impulse Under Selected Trend Filters

(General government, in percent of potential output, unit elasticity)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Source: IMF staff estimates.
Figure 9.
Figure 9.

Fiscal Impulse Under Selected Elasticities

(General government, in percent of potential output, HP filter)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Source: IMF staff estimates.

Complementary Indicators

30. Given the caveats noted earlier, it is sensible to look at complementary indicators as well to monitoring and guide policy decisions. One often used “rule-of-thumb” is to compare real growth in primary spending with potential GDP growth. Real primary spending has been growing at about 9½ percent a year over the past three years, well above potential GDP growth, and thus helping fuel the economy during the upturn (Figure 10). This continued into 2010, even as the output gap closed. In the first semester of 2010, real primary spending increased 11.4 percent (y/y), compared with long-run potential GDP growth of about 4 percent.

Figure 10.
Figure 10.

Economic and Real Primary Spending

(Real growth rates)

Citation: IMF Staff Country Reports 2011, 063; 10.5089/9781455219025.002.A001

Sources: Banco Central del Uruguay, Ministry of Finance and IMF staff estimates.

D. Conclusions

31. Measures of cyclically-adjusted fiscal balance can help assess and guide fiscal policy. Focusing on CABs rather than nominal deficit targets can strengthen fiscal policy design. And publishing CABs can enhance public understanding of fiscal policy and trade–offs. During booming times, CABs help by avoiding masking transitory revenues with structural ones. During bad times, CABs help by providing an estimate of automatic stabilizers.

32. For Uruguay, estimating CABs is still very much work in progress. Further work will be needed on potential output, revenue and expenditure elasticities, one-off factors, and state-owned enterprises activities. Therefore, caution is needed in interpreting the results and a broad set of complementary indicators should be used.

Cyclically Adjusted Balance or Structural Balance for Policy Decision Making: Country Experience

Targeting the cyclically adjusted balance or structural balance rather than the headline balance (standard balance) can help policy makers to increase credibility, reduce pro- cyclicality, and fiscal sustainability by reducing public debt. As some selected country experience has demonstrated, countries with some institutionalized fiscal rule framework have benefitted by saving revenues during the upside of the economic cycle and deploying important fiscal stimulus programs during downturns, especially during the recent global economic recession.

Chile introduced a fiscal rule framework in 2001. The rule is based on the structural balance and is in a revision process by an expert committee with the objective to make it a second generation rule which will further enhance transparency, coverage, the computation of the structural balance and its uses. Since its inception, the design and implementation of fiscal policy based on the structural balance has greatly contributed to signal a prudent and responsible fiscal stance. The main benefits of Chile’s fiscal rule include: a) reducing procyclicality, b) reducing financing needs, c) improving the availability of stable resources to finance social programs. During last year’s crisis, Chile was able to draw about US $9 billion from the Economic Stabilization Fund providing a large fiscal stimulus program. In summary, Chile’s macroeconomic and social achievements lie in its structural balance approach.

Colombia originally introduced a fiscal rule framework in 1997. The current Organic Law on Fiscal Transparency and Responsibility approved in 2003, which combines a balanced budget rule with expenditure targets as well as debt sustainability objectives, has contributed to reduce public debt from 50 percent of GDP at end-2002 to 32 percent of GDP at end-2008. A draft law was recently sent to Congress to enhance the current framework. The law envisages a gradual fiscal consolidation, requiring the central government to reduce its structural deficit to1.5 percent of GDP from the 3.5 percent of GDP in 2009; furthermore, it requires that future fiscal surpluses be saved into a stabilization fund.

Mexico approved a Budget and Fiscal Responsibility Law in 2006. The Law introduced a balanced-budget fiscal rule. The new macroeconomic framework has been successful in enhancing credibility and reducing public debt. Spending, however, has shown some level of cyclicality as it reflects oil and output fluctuations. Such performance has been affected by the fact that the rule targets the nominal fiscal balance which is affected by oil revenue volatility. Partial efforts to adopt a formula to reflect long term oil prices and save some of the windfalls are being made; yet, a structural balance rule has not being fully incorporated to save revenue buoyancy during good times and act countercyclical in bad times.

Peru enacted its “Ley de Responsabilidad y Transparencia Fiscal” in 1999. The main objective of the law was to promote fiscal discipline in a transparent, credible and sustainable way. The law was enhanced in 2003 by adding the objective of reducing public debt. Despite some rigidities in public spending, Peru’s fiscal rule has helped to consolidate fiscal accounts and fiscal discipline. Years of accumulating surpluses allowed for countercyclical fiscal policy during the recent global recession, with a substantial fiscal stimulus of 2.5 percent of GDP allowing the economy to grow around 1 percent in real terms.

Peru and Mexico’s rule have escape clauses which allowed them to adjust prior to the recent crisis. In the case of Peru, the escape clause was waived for the fiscal stimulus program.

References

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1

Prepared by Manuel Rosales Torres. I thank the very useful comments received from the staff of the Ministry of Economy and Finance and the Banco Central del Uruguay.

2

For a more comprehensive overview on the ability of countries to implement countercyclical fiscal policies in Latin America, see IMF, 2009.

3

The draft budget included a ceiling on the annual growth of real primary spending equivalent to 3.0 percent; the proposal by the Ministry of Economy and Finance, however, was not adopted by Parliament.

4

The treatment of transitory tax changes has been a particular issue under discussion.

8

Estimates of potential output and trend growth could differ slightly given a larger sample period.

9

In the future, as the impact of soy prices and other commodity exports gain significance in Uruguay, it will be important to disentangle the cyclical effects from those revenues generated by purely domestic sources from those stemming from the external conditions (which are likely not fully aligned with the domestic cycle).

10

Relevant work in this area has been done by Romaniello (2010).

11

To improve the accuracy in estimating structural revenues and expenditures, future works should focus on the national accounts methodology developed by OECD.

12

For a comprehensive discussion of one-off adjustments, see OECD’s “Accounting for one-off operations when assessing underlying fiscal positions.” Working Paper No. 642, 2008.

13

The contribution to growth from the construction of the pulp mill factory was about 2.5 percent in 2008.

Uruguay: Selected Issues Paper
Author: International Monetary Fund
  • View in gallery

    Real GDP and Trends

    (In billions of Uruguayan Pesos)

  • View in gallery

    Real GDP and Trends

    (Year-on-year percent change)

  • View in gallery

    Output Gaps

    (As percent of potential GDP)

  • View in gallery

    Fiscal Impulse, Output Gap, and Change in Output Gap

    (Public Sector, in percent of GDP)

  • View in gallery

    Fiscal impulse under selected trend filters

    (In percent of potential output, unit elasticity)

  • View in gallery

    Fiscal impulse under selected elasticities

    (in percent of potential output, HP filter)

  • View in gallery

    Fiscal Impulse, Output Gap, and Change in Output Gap

    (Central government, in percent of GDP)

  • View in gallery

    Fiscal Impulse Under Selected Trend Filters

    (General government, in percent of potential output, unit elasticity)

  • View in gallery

    Fiscal Impulse Under Selected Elasticities

    (General government, in percent of potential output, HP filter)

  • View in gallery

    Economic and Real Primary Spending

    (Real growth rates)