Lopez-Claros, Augusto2014-03-182014-03-182014-03https://hdl.handle.net/10986/17286The global financial crisis and the response to it have contributed to a sharp increase in public indebtedness in a large number of countries. While there have been episodes of high debt in the past, there are a number of long-term challenges today that are likely to complicate the implementation of sustainable fiscal policies in the coming years. Population aging and climate change are factors that are likely to contribute to rising fiscal pressures and the crisis has highlighted the risks and vulnerabilities stemming from reduced fiscal space. This paper argues that heightened fiscal challenges can only be dealt with successfully by adopting a long-term fiscal planning horizon. The paper analyzes a range of available policy tools that countries have used in the past to improve fiscal management. Particular attention is paid to the role of rules-based policies, improvements in the budget process, better accounting of long-term liabilities in the government budget, the deleterious effects of unproductive expenditures, and the painful trade-offs created by the crisis and the toolkit at hand to address them.en-USCC BY 3.0 IGOACCESS TO INFORMATIONACCOUNTINGADVANCED ECONOMIESASSET POSITIONBAILOUTBALANCE SHEETBANK DEPOSITSBANKING CRISESBANKING SECTORSBANKING SYSTEMBINDING CONSTRAINTBONDBOND TRADERSBOOM GENERATIONBORROWING REQUIREMENTBUDGET CONSTRAINTBUDGET DEFICITBUDGET DEFICITSBUDGET REVIEWSBUDGETINGBUSINESS CYCLECAPITAL ACCOUNTCAPITAL FLIGHTCAPITALIST ECONOMIESCASH MANAGEMENTCENTRAL BANKCENTRAL BANK SUPPORTCENTRAL BANKSCOMMODITIESCOMMUNICATION TECHNOLOGIESCOMPETITIVE MARKETCONFIDENCE OF INVESTORSCONTINGENT LIABILITIESCREDIBILITYCREDIT DERIVATIVESCREDIT LINESCREDITORSCRISIS COUNTRIESCURRENCYCURRENCY BOARDDEBTDEBT BURDENDEBT DEFAULTDEBT DEFAULTSDEBT LEVELDEBT LEVELSDEBT MANAGEMENTDEBT OBLIGATIONSDEBT REDUCTIONDEBT SERVICEDEBT SERVICINGDEBT SERVICING COSTSDEBT-SERVICEDEFICITSDEMOCRACYDEMOGRAPHICDEPOSITDEPOSIT INSURANCEDEVALUATIONDEVELOPING COUNTRIESECONOMIC DEVELOPMENTECONOMIC DOWNTURNECONOMIC EFFICIENCYECONOMIC POLICIESEMERGING MARKETSEQUIPMENTEQUITIESEQUITY MARKETSEQUITY PRICESEXCHANGE RATEEXPENDITUREEXPENDITURESEXPORTERSFERTILITY RATESFINANCIAL CRISESFINANCIAL CRISISFINANCIAL HEALTHFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SUSTAINABILITYFINANCIAL SYSTEMFINANCING REQUIREMENTFISCAL BURDENFISCAL CONSOLIDATIONFISCAL DEFICITFISCAL DEFICITSFISCAL DISCIPLINEFISCAL EFFORTFISCAL POLICIESFISCAL POLICYFOOD PRICESFOREIGN CURRENCYFOREIGN CURRENCY DEBTSFOREIGN DIRECT INVESTMENTGENERATIONAL ACCOUNTINGGENERATIONAL ACCOUNTSGLOBAL ECONOMYGLOBAL FINANCIAL SYSTEMGLOBAL OUTPUTGOVERNMENT BONDSGOVERNMENT BUDGETGOVERNMENT BUDGET DEFICITGOVERNMENT DEBTGOVERNMENT EXPENDITUREGOVERNMENT EXPENDITURESGOVERNMENT POLICYGOVERNMENT REVENUEGOVERNMENT REVENUESGOVERNMENT SECURITIESGROSS DEBTHOLDINGSHUMAN CAPITALINCENTIVE STRUCTUREINCOMEINDEBTED COUNTRIESINDEBTEDNESSINDUSTRIAL COUNTRIESINFLATIONINFLATIONARY EXPECTATIONSINSTRUMENTINSURERSINTEREST PAYMENTSINTEREST RATEINTERNATIONAL BANKINTERNATIONAL FINANCEINTERNATIONAL MARKETSINTERNATIONAL STANDARDSINTERNATIONAL TRADEINVESTOR CONFIDENCEJOB CREATIONLABOR MARKETLEVEL OF DEBTLIABILITYLIFE EXPECTANCYLIQUID ASSETSLIQUIDITYLIVING STANDARDSLONG-TERM INTERESTLONG-TERM INTEREST RATESLONG-TERM LIABILITIESMACROECONOMIC POLICIESMACROECONOMIC STABILITYMARKET CONFIDENCEMARKET PARTICIPANTSMARKET VOLATILITYMATURITIESMATURITYMONETARY POLICIESMONETARY POLICYMORTGAGEMORTGAGE MARKETSMUTUAL FUNDSNATURAL DISASTERSNOMINAL INTEREST RATEOIL PRICESOPPORTUNITY COSTOUTSTANDING PUBLIC DEBTPENSIONPENSION FUNDPENSION FUND ASSETSPENSION FUND INVESTMENTSPENSION FUNDSPENSION SYSTEMPENSIONSPOLICY RESPONSESPOLITICAL ECONOMYPOLITICAL STABILITYPOLITICAL SYSTEMSPOPULATION AGEINGPRICE STABILITYPRIVATE INVESTORSPRIVATE PENSIONPRIVATE SECTOR DEVELOPMENTPROPERTY RIGHTSPUBLIC DEBTPUBLIC DEBTSPUBLIC FINANCESPUBLIC FUNDSPUBLIC INVESTMENTPUBLIC PENSIONPUBLIC PENSIONSPUBLIC POLICYPUBLIC SECTOR BORROWINGPUBLIC SPENDINGRATE OF GROWTHRATES OF INFLATIONREAL ESTATEREAL INTERESTREAL INTEREST RATESREGULATORY BARRIERSREGULATORY FRAMEWORKRESERVERESERVESRETIREMENT AGERETIREMENT AGESRETURNRISK FACTORSRULE OF LAWSAFETY NETSSAVINGSSECURITY RISKSSHAREHOLDERSSHORT-TERM INTEREST RATESMALL BUSINESSESSMALL COUNTRYSOCIAL PROTECTIONSOCIAL SAFETY NETSSOLVENCYSTATE GUARANTEESSTOCKSSUSTAINABLE GROWTHTAXTAX POLICYTAX RATESTAX REGIMETAX SYSTEMTAX SYSTEMSTECHNOLOGICAL ADVANCESTRADE UNIONSTRANSPARENCYTREASURYURBANIZATIONVARIABLE RATESWHOLESALE FUNDINGWORLD ECONOMY10.1596/1813-9450-6805