Does accrual-based government financial information serve as an indicator of fiscal risks?

초록

This paper shows accrual-based government financial information is an effective indicator of fiscal risk. The authors analysed the association of accrual-based government financial information (government liabilities and fiscal balance) with fiscal risks (proxied by sovereign credit ratings and sovereign bond yields). Analysing 24 OECD member states from 1997 to 2015, the authors found that the greater a government's liabilities, the lower its sovereign credit rating and the higher its sovereign bond yields. In addition, the sounder a country's fiscal balance, the higher its sovereign credit rating and the lower its sovereign bond yields.

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