Fiscal Positions and Business Cycles
methods, notes and classification
Fiscal positions and business cycles (FPBC): Annual data
Notes:
The Fiscal Positions and Business Cycles (FPBC) database contains detailed quantitative information on potential output and output gaps, on NAWRUs (non-accelerating wage rate of unemployment), on actual and cyclically-adjusted government revenues, outlays and balances, and on government financial liabilities (including debt series consistent with the Maastricht criterion) for twenty OECD countries.
Changes Since the last edtions:
The data for the OECD INTERLINK model and for the OECD Economic Outlook aggregates are rebased to 1995
Base-year and SNA/ESA Reporting System Changes
Many countries are changing to the SNA1993/ESA95 for national accounts data. In the present edition, the status is:
…………Expenditure….Household Accounts..Government Accounts.Chain.Base ……………………………………………………………….Year
United States..NIPA tables…….NIPA tables……NIPA tables…….YES..1996 …………(SNA93 from 1959q1)..(SNA93from 1959q1).(SNA93 from 1960q1) Japan……….SNA68………….SNA68…………SNA68………….NO….1990 Germany……..ESA95 from 1991…ESA95 from 1991..ESA95 from 1991…NO….1995 France………ESA95 from 1985…ESA95 from 1992..ESA95 from 1992…NO….1995 Italy……….ESA95 from 1988…ESA79…………ESA95 from 1995…NO….1995 United Kingdom.ESA95………….ESA95 from 1987..ESA95 from 1987…NO….1995 Canada………SNA93 from 1955…SNA93 from 1955..SNA93 from 1955…NO….1992 Australia……SNA93 from 1959…SNA93 from 1959..SNA93 from 1959…YES.1997/98 Austria……..ESA95.from 1995…ESA79…………ESA95.from 1995…NO….1995 Belgium……..ESA95 from 1970…ESA79…………ESA95 from 1980…NO….1995 Denmark……..ESA95 from 1988…ESA95 from 1988..ESA95 from 1988…NO …1995 Finland……..ESA95 from 1988…ESA95 from 1988..ESA95 from 1988…NO….1995 Greece………ESA95 from 1995…Not available….ESA95 from 1995…NO….1995 Ireland……..ESA95 from 1990…ESA95 from 1990..ESA95 from 1990…NO….1995 Netherlands….ESA95 from 1995…ESA95 from 1995..ESA95 from 1995…YES…1995 New Zealand….SNA68………….SNA68…………SNA68………….NO..1991/92 Norway………SNA93 from 1978…SNA93 from 1978..SNA93 from 1978…YES…1990 Portugal…….ESA79………….ESA79…………ESA79………….NO….1990 Spain……….ESA95 from 1995…ESA79…………ESA95 from 1995…NO….1995 Sweden………ESA95 from 1993…ESA95 from 1993..ESA95 from 1993…YES…1995
IMPORTANT INFORMATION:
All data are in level form with the historical annual data starting in 1970 and with the annual projections for 2000 and 2001 consistent with the Economic Outlook No.67, June 2000. Nominal variables are expressed in local currency and in millions .
UNITS: Real (volume) variables are in local currency, in constant price base year and in millions of local currency or USD.
Price variables are given as an index, with 100 in the base year.
Employment variables are in persons or person-years.
Ratios are given as a percentage of the relevant variable.
It should be noted, however, that while an overall framework is presented, not every series will necessarily be available for every country. Starting dates may differ. For example, the country-specific concepts, ZCS001 to ZCS020, are only important for a few countries.
Data for gross domestic product are taken from official national accounts published by national statistical authorities. These national accounts are also used to calculate the output of the business sector. Sources and definitions of the labour market data are described in detail in Sources and Methods of the OECD Economic Outlook. The labour market data are not always consistent with the national authorities definitions and those used in the OECD " Labour Force Statistics."
Capital stock data are obtained from national sources whenever possible. For countries without official national estimates, the perpetual inventory method has been applied, estimating capital stock data from available investment data and estimates of service lives.
Data for the general government appropriation account are also taken from official national accounts. In principle, these should be closely aligned with the "System of National Accounts"- System of National Accounts 1993, Commission of the European Communities - Eurostat, International Monetary Fund, Organisation for Economic Co-operation and Development, United Nations and World Bank. However, statistical practices in member countries do not always fully comply with SNA guidelines. The treatment adopted by each country is generally documented in the relevant national accounts publication.
Data for government financial assets and liabilities is taken from a range of data sources, as only a minority of countries publish a full sector-by-sector balance sheet as part of their national accounts. For a number of countries data on government assets and liabilities are published separately, by the national statistical office, by the Ministry of Finance or by the Central Bank. These sources may not however, include the full range of financial assets and liabilities. In addition, because they have not been prepared within a consistent framework that reconciles the flows each year with the accumulation of assets and liabilities, there may be significant statistical discrepancies.
For countries which are members of the European Union, debt according to the definition that applies under the Maastricht Treaty have been included. This definition differs from that used for government financial liabilities, in two main respects: under the Maastricht definition, debt is valued at nominal value and trade credits are excluded.
A production function approach is applied to estimate potential output, using a two-factor constant returns-to-scale Cobb-Douglas production function, with employment and capital as production factors. Potential output depends on potential employment, the actual capital stock and trend labour efficiency. Trend labour efficiency is a Hodrick-Prescott filter of actual labour efficiency. Potential employment depends on the trend labour force and the NAWRU, the non-accelerating wage rate of unemployment. Historical data on wages and unemployment are used to estimate the NAWRU. These estimates are adjusted in the light of OECD Secretary country experts with additional country information. (The production function approach is not applied for Portugal. Portuguese potential output is computed as a Hodrick-Prescott filter of total GDP volume.)
The output gap is measured as the percentage difference between actual GDP in constant prices and estimated potential output (for Norway, potential output and the output gaps cover mainland only). The method applied means that the gap does not only depend on the difference between the unemployment rate and the NAWRU but also on the difference between actual and trend labour efficiency, and the difference between actual and trend labour force participation rate.
The method is described in more detail in Economic Outlook No.56, December 1994, as well as in "Potential output, output gaps and structural budget balances" by Claude Giorno, Pete Richardson, Deborah Rosevaere and Paul van den Noord, OECD Economic Studies, No.24,1995/I and in OECD Economics Department working paper No.152, 1995 by the same authors.
2.2 Cyclically-adjusted (structural) government revenues, expenditures and balances
General government revenues and expenditures can be separated into those revenues and expenditures (disbursements) which are affected by cyclical developments — the divergence between actual output and potential output — and those which are of a structural or non-cyclical nature. In most cases, developments in non-cyclical revenues and expenditures reflect policy decisions made by governments and provide an indication of discretionary fiscal policy. But some revenue and expenditure flows may reflect neither cyclical factors nor discretionary fiscal policy, for example, changes in resource revenues due to oil price movements or changes in interest payments due to interest-rate variation. Nevertheless, these movements are included in the structural or non-cyclical part of revenues and expenditures
The structural component of revenues and expenditures are derived by calculating the revenues and expenditures that would pertain if output were at its potential level. The structural levels of revenues (Tti) and expenditures (Gt) that are sensitive to the level of output are derived from actual taxes (Tti) and current primary expenditures (Gt) as follows:
Tti* = Tti(GDPt*/GDPt)ai ai > 0
Gt* = Gt(GDPt*/GDPt)b b < 0
where GDP* is the level of potential output in current prices and GDP is the level of actual output at current prices. The elasticities of different types of taxes with respect to nominal output growth are given by ai and b is the elasticity of current primary expenditure with respect to nominal output. The tax categories which are cyclically adjusted are household direct taxes, business taxes, social security contributions and indirect taxes.
Once the cyclically-adjusted taxes and expenditures have been calculated, non-adjusted items such as interest payments and receipts and capital spending are added to derive total structural revenues, expenditures and net lending. Structural revenues and expenditures are expressed as a percentage of potential output rather than actual output to eliminate changes from year to year that would result from cyclical changes in the denominator if actual GDP were used.
It must be stressed that the estimated structural budget positions are subject to large margins of uncertainty. First, potential output itself is not directly measurable and must be estimated and, second, the estimated elasticities may not always fully capture the relationship between output and tax revenues and expenditures. These elasticities themselves may change over time.
Explanatory Notes 
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CLASSIFICATION PLAN:
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STRUCTURE OF THE CODE : XXX / XXXXXX
SUB-CODES :
1 XXX...... Country
2 ...XXXXXX Indicator
SUB-CODE 1 : Country
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AUS Australia
AUT Austria
BEL Belgium
CAN Canada
DNK Denmark
EUR European Community
EUW European Community (<=1991)
FIN Finland
FRA France
DEU Germany
GRC Greece
IRE Ireland
ITA Italy
JPN Japan
NLD Netherlands
NZL New Zealand
NOR Norway
PRT Portugal
ESP Spain
SWE Sweden
GBR United Kingdom
USA United States
SUB-Code 2 : Indicator
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CAPOG Net Capital Outlays, Government
CFKG Consumption of Fixed Capital, Government
CG Government Consumption, Value
CGAA Government Consumption, Value (Appropriation Account)
CGNW Government Consumption, Excluding Wages
CGW Government Consumption, Wages
CLFS Ratio of Total Employment National Accounts Basis and Survey
ECSA Employment, Country Specific
EG Employment, Government
ELEFF2 Trend Labour Efficiency, Business Sector
ELEFFU Labour Efficiency, Business Sector
ETB Employment, Business
ETBPT Employment, Business, Potential
EXCH Exchange Rate ($US per local)
GAP Output Gap
GDP Gross Domestic Product (Market prices), Value
GDPBV Gross Domestic Product,Business (Factor Cost) Volume
GDPCSA Gross Domestic Product, Country specific, Volume
GDPTR Potential Output, Total Economy at Current Prices
GDPV Gross Domestic Product (Market prices), Volume
GDPVTR Potential Output, Total Economy, Volume
GFAR Ratio of Government Assets to GDP
GGFL Gross Government Debt
GGFLM Gross Government Debt, Maastricht criterion
GGFLMQ Gross Government Debt, Maastricht criterion, % GDP
GGFLQ Gross Government Debt, % GDP
GGINTP Gross Government Interest Payments
GGINTR Gross Government Interest Receipts
GNFL Government, Net Financial Liabilities
GNFLQ Government, Net Financial Liabilities, % GDP
GNINTP Net Government Interest Payments
GNINTQ Net Government Interest Payments, % GDP
HRS Average Hours Per Employee
HRST Trend-Average Hours Per Employee
IFU3 Ratio of Actual and Potential Output
IG Fixed Investment, Government, Value
IGAA Government Investment (Appropriation Account)
KBV Capital Stock, Business
KTRRG Net Capital Transfers Received by Government
LF Labour Force, Total
LFPR Labour Force, Participation Ratio
LFPRS Labour Force, Participation Ratio, Trend
LFS Labour Force, Trend
NITV Net Indirect Taxes, Volume
NLG Net Lending, Government
NLGA Net Lending, Government, Cyclically Adjusted
NLGM Net Lending, Government, Maastricht criterion
NLGMQ Net Lending, Government, Maastricht criterion, % GDP
NLGMQA Net Lending, Government, Maastricht criterion, Cyclically Adjusted, % Potential GDP
NLGQ Net Lending, Government, % GDP
NLGQA Net Lending, Government, Cyclically Adjusted, % Potential GDP
NLGX Primary Government Balance
NLGXA Primary Government Balance,Cyclically Adjusted
NLGXQ Primary Government Balance, % GDP
NLGXQA Primary Government Balance, Cyclically Adjusted, % Potential GDP
PCGW Deflator, Government Consumption of Goods and Services, Wages
PCP Deflator, Private Consumption
PIG Deflator, Fixed Investment, Government
POPT Population, Total (Between 15 & 64 years old)
PPP Purchasing Power Parities
QBVTR Gross Output, Business, Volume, Trend
RESTG Other Capital Transactions, Government
SAVG Savings, Government
SDGDPV Statistical Discrepancy, Real GDP
SDGNFL Statistical Discrepancy of Government Net Financial Liabilities
SSPG Social Benefits Paid by Government
SSRG Social Security Contributions Received by Government
SSRGA Social Security Contributions Received by Government, Cyclically Adjusted
TIND Indirect Taxes
TINDA Indirect Taxes, Cyclically Adjusted
TRPG Other Current Transfers Paid by Government
TRRG Other Current Transfers Received by Government
TSUB Subsidies
TY Total Direct Taxes
TYB Direct Taxes, Business
TYBA Direct Taxes, Business, Cyclically Adjusted
TYH Direct Taxes, Households
TYHA Direct Taxes, Households, Cyclically Adjusted
UNR Unemployment Rate
UNRMIN NAWRU, Non-Accelerating Wage Rate of Unemployment
YPEPG Property Income Paid by Government
YPEPGX Property Income Paid by Government, Excluding Interest
YPERG Property Income Received by Government
YPERGX Property Income Received by Government, Excluding Interest
YPG Current Disbursements, Government
YPGA Current Disbursements, Government, Cyclically Adjusted
YPGQA Current Disbursements, Government, Cyclically Adjusted, % Potential GDP
YPGT Total Disbursements Government
YPGTQ Total Disbursements Government, % GDP
YPGX Current Disbursements, Government, Excluding Interest
YPGXA Current Disbursements, Excluding Interest, Government, Cyclically Adjusted
YRG Current Receipts, Government
YRGQ Current Receipts, Government, % GDP
YRGQA Current Receipts, Government, Cyclically adjusted, % Potential GDP
YRGA Current Receipts, Government, Cyclically Adjusted
YRGX Current Receipts, Government, Excluding Interest
ZCS001 Country Specific 1
ZCS002 Country Specific 2
ZCS004 Country Specific 4
ZCS005 Country Specific 5
ZCS006 Country Specific 6
ZCS007 Country Specific 7
ZCS008 Country Specific 8
ZCS009 Country Specific 9
ZCS011 Country Specific 11
ZCS012 Country Specific 12
ZCS013 Country Specific 13
ZCS014 Country Specific 14
ZCS017 Government net lending, Maastricht adjustment, value
ZCS020 Country Specific 20
Units:
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All data are in level form with the historical annual data starting in 1970 and
with the annual projections for 2000 and 2001 consistent with the Economic
Outlook No.67, June 2000.
Nominal variables are expressed in local currency and in millions .
Real (volume) variables are in local currency, in constant price base year and
in millions of local currency or USD.
Price variables are given as an index, with 100 in the base year.
Employment variables are in persons or person-years.
Ratios are given as a percentage of the relevant variable.