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Fiscal Balance (fiscal + balance)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting75%

Selected Abstracts

How Big Was the Effect of Budget Consolidation on the Australian Economy in the 1990s?

THE AUSTRALIAN ECONOMIC REVIEW, Issue 1 2006
Lei Lei Song
This article evaluates the effects of budget consolidation on the Australian economy in the 1990s. As the economy recovered from the 1991,92 recession, the need to improve the fiscal balance to lift national saving became the dominant influence on fiscal policy. The article argues that spending cuts by the Australian federal government announced in 1996 had immediate effects on financial markets, with reduced long-term interest rates of about 50 basis points in 1996,97. Using a modified version of the Treasury macroeconometric model of the Australian economy (TRYM), the article simulates the net macroeconomic effects of the expenditure cuts, fiscal consolidation and lower long-term interest rates. The article finds that the program of budget consolidation had a sizeable short- and medium-term impact on the economy, raising Gross Domestic Product by up to three-quarters of a percentage point and reducing unemployment by 0.3 percentage points over the next two to three years. [source]

Transparency, Political Polarization, and Political Budget Cycles in OECD Countries

AMERICAN JOURNAL OF POLITICAL SCIENCE, Issue 3 2006
James E. Alt
We investigate the effects of fiscal transparency and political polarization on the prevalence of electoral cycles in fiscal balance. While some recent political economy literature on electoral cycles identifies such cycles mainly in weak and recent democracies, in contrast we show, conditioning on a new index of institutional fiscal transparency, that electoral cycles in fiscal balance are a feature of many advanced industrialized economies. Using a sample of 19 OECD countries in the 1990s, we identify a persistent pattern of electoral cycles in low(er) transparency countries, while no such cycles can be observed in high(er) transparency countries. Furthermore, we find, in accordance with recent theory, that electoral cycles are larger in politically more polarized countries. [source]

Fiscal policy and structural reforms in transition economies

THE ECONOMICS OF TRANSITION, Issue 1 2001
An empirical analysis
This paper provides an empirical examination of the relationship between fiscal balance and structural reforms using panel data from 25 transition economies. The results indicate that privatization and restructuring, via unemployment, affect the fiscal balance negatively. This finding provides support for ideas in theoretical transition economics that maintain that fiscal pressures are most severe in fast-reforming countries. In contrast, price liberalization has a robust positive impact on fiscal performance. In addition, the results differ somewhat over different countries and transition time. [source]

Obstacles to disinflation: what is the role of fiscal expectations?

ECONOMIC POLICY, Issue 40 2004
Oya Celasun
SUMMARY Disinflation deficits Persistently high expected inflation often makes it difficult for policy-makers to recover from inflationary episodes without substantial output losses. Using survey data from eleven disinflation episodes, we can assess whether the more or less sluggish decline of inflation rates towards lower target levels is related to backward-looking pricing behavior or to imperfect credibility of the stabilization efforts. We find that expectations of future inflation play a much more important role than past inflation in shaping the inflation process. Second, we find that an improvement in various measures of fiscal balances significantly reduces inflation expectations. This evidence suggests that, when attempting to stabilize inflation, priority should be given to building fiscal credibility. , Oya Celasun, R. Gaston Gelos and Alessandro Prati [source]