TY - BOOK ID - 133744295 TI - Walking Up the Down Escalator : Public Investment and Fiscal Stability AU - Easterly, William AU - Irwin, Timothy AU - Serven, Luis PY - 2007 PB - Washington, D.C., The World Bank, DB - UniCat KW - Accounting KW - Bank Policy KW - Banks and Banking Reform KW - Budget KW - Cash Flow KW - Cash Flows KW - Debt KW - Debt Markets KW - Defic Exchange KW - Economic Stabilization KW - Economic Theory and Research KW - Emerging Markets KW - Finance and Financial Sector Development KW - Financial Literacy KW - Fiscal Discipline KW - Future KW - Investment and Investment Climate KW - Investment Spending KW - Investments KW - Liquidity KW - Macroeconomics and Economic Growth KW - Non Bank Financial Institutions KW - Private Financing KW - Private Investment KW - Private Sector Development KW - Public Investment KW - Public Investments KW - Public Sector Economics and Finance KW - Public Sector Expenditure Analysis and Management KW - Public Spending KW - Revenues KW - Tax UR - https://www.unicat.be/uniCat?func=search&query=sysid:133744295 AB - Fiscal adjustment becomes like walking up the down escalator when growth-promoting spending is cut so much as to lower growth and thus the present value of future tax revenues to a degree that more than offsets the improvement in the cash deficit. Although short-term cash flows matter, a preponderant focus on them encourages governments to invest too little. Cash flow targets also encourage governments to shift investment spending off budget, by seeking private investment in public projects-irrespective of its real fiscal or economic benefits. To evade the action of cash flow targets, some have suggested excluding from their scope certain investments (such as those undertaken by public enterprises deemed commercial or financed by multilaterals). These stopgap remedies might sometimes help protect investment, but they do not provide a satisfactory solution to the underlying problem. Governments can more effectively reduce the biases created by the focus on short-term cash flows by developing indicators of the long-term fiscal effects of their decisions, including accounting and economic measures of net worth, and where appropriate including such measures in fiscal targets or even fiscal rules, replacing the exclusive focus on liquidity and debt. ER -