Structural budget deficits - EP164

The governments of many countries have structural budget deficits, so even as their economies recover from the COVID-recession they are still running deficits. In many countries, the fundamental structure of the budget is bad. There is too much spending relative to revenue, even in normal or good times, not just in recession. In this episode we explore how economists can calculate structural budget balances. We look specifically at what the Australian Treasury does, given that a new Australian Budget came out last week.Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. Links relevant to the conversationAustralian structural budget balance indicators available here:https://budget.gov.au/2022-23-october/content/bp1/download/bp1_bs-3.pdfAustralian Treasury methodology for estimating structural budget balances:https://treasury.gov.au/publication/economic-roundup-issue-3-2010/economic-roundup-issue-3-2010/estimating-the-structural-budget-balance-of-the-australian-governmentIMF Fiscal Monitor which contains cyclically-adjusted budget balances (Tables A3 and A4):https://www.imf.org/en/Publications/FMMedia coverage of Australian budget:https://www.theaustralian.com.au/nation/politics/jim-chalmers-takes-forensic-approach-to-tax-concessions/news-story/25c4e1be826abb87f27c918532a69614https://www.theaustralian.com.au/nation/bill-shorten-admits-push-to-curb-ndis-cost-growth/news-story/8a15cb3daabd55961e35df957f206bcfIFS analysis of UK mini budget:https://ifs.org.uk/articles/mini-budget-responseCreditsThanks to Josh Crotts for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. Please consider signing up to receive our email updates and to access our e-book Top Ten Insights from Economics at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.