In this paper, we do in-depth research on fiscal consolidation experiences of many countries. In particular, we focus on OECD countries' policy experiences for fiscal adjustment with through studies as well as a variety of empirical analyses, from which we try to draw some implications on the implementation of Korea's current fiscal consolidation policy.
This paper consists of 5 chapters. Chapter 1 consists of three sections. In section 1, we analyze the recent fiscal problems of advanced countries, emerging countries and Korea based on vast works of literature such as fiscal policy reports, statistics, projections and research papers on fiscal adjustments from individual nations and international institutes such as the IMF and OECD. In section 2, we focus on OECD countries' debt-soaring experience, from which we learn that most countries failed to downsize their debt-to-GDP ratios once they experienced a large deterioration of public finances regardless of efforts toward fiscal consolidation. In section 3, we recommend some fiscal policy instruments which are believed to be critical for fiscal consolidation of Korea. First, fiscal policy authorities need to retrieve some of their temporary expansionary actions which were implemented to counteract the recent crisis. Fiscal authorities need to take into account age-related spending which will soon become the most serious threat to the soundness of Korea's public finance. Moreover, fiscal authorities need to improve the mid-term fiscal planning system, performance-based fiscal management system and enforce temporary fiscal rules for fiscal consolidation. For the revenue side, we believe an additional tax scheme or a statutory marginal income tax rate increase is not needed at this point. Instead, fiscal authorities have to downsize the tax expenditure by reducing redundant tax exemptions and strive to capture hidden sources of income. Furthermore, the statutory corporate income tax rate should be converted into a flat rate system along with eliminations of some tax expenditure which are unrelated to positive externality. (The rest omitted)
- 바람직한 재정건전화 정책과 정책과제(Current and future tasks for desirable fiscal consolidation policy)
- 박형수; 송호신
바람직한 재정건전화 정책과 정책과제(Current and future tasks for desirable fiscal consolidation policy)
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|