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Fiscal Policy (fiscal + policy)
Kinds of Fiscal Policy Terms modified by Fiscal Policy Selected AbstractsON THE EFFECTIVENESS OF FISCAL POLICY AS AN INSTRUMENT OF MACROECONOMIC POLICYECONOMIC AFFAIRS, Issue 1 2009Philip Arestis This paper demonstrates that fiscal policy is an effective and essential instrument of stabilisation macroeconomic policy. This is particularly so if it is co-ordinated with monetary policy, especially in the current worldwide economic situation. [source] FISCAL POLICY, EXPECTATION TRAPS, AND CHILD LABORECONOMIC INQUIRY, Issue 3 2007PATRICK M. EMERSON This paper develops a dynamic model with overlapping generations where there are two possible equilibria: one without child labor, and one with it. It is shown that intergenerational transfers can eliminate the child labor equilibrium and that this intervention is Pareto improving. However, if society does not believe that the government will implement the transfer program, it won't, reinforcing society's expectations. This is true even if the transfer program would have been implemented in the absence of uncertainty. Thus a government may be powerless to prevent the child labor equilibrium if it does not command the confidence of their populace, leaving the country in an expectations trap. (JEL D91, E60, J20, O20) [source] COORDINATION OF MONETARY AND FISCAL POLICY IN A MONETARY UNION: POLICY ISSUES AND ANALYTICAL MODELSTHE MANCHESTER SCHOOL, Issue 2007Article first published online: 9 AUG 200, MATTHEW B. CANZONERI The European Monetary Union raises new and interesting questions about the coordination of monetary and fiscal policy. In this lecture, I discuss some of these questions and the answers that a new class of models,new neoclassical synthesis (NNS) models,is currently giving to them. I will argue that the new questions expose some weaknesses in current NNS modeling; in particular, the models do not seem to explain the positive correlation between national inflation and growth differentials that has been observed in the European data. I also review some recent work that has been done on policy coordination within a currency union. [source] Equilibrium Determinacy under Monetary and Fiscal Policies in an Overlapping Generations ModelECONOMIC NOTES, Issue 3 2005Alessandro Piergallini This paper studies the issue of equilibrium determinacy under monetary and fiscal policy feedback rules in an optimizing general equilibrium model with overlapping generations and flexible prices. It is shown that equilibria may be determinate also when monetary and fiscal policies are both ,passive'. In particular, under passive monetary rules, equilibrium uniqueness is more likely to be verified when fiscal policies are less committed to public debt stabilization. [source] Modernization of Tax Administrations and Optimal Fiscal PoliciesJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 6 2009MARTIN BESFAMILLE Since Sandmo (1981), many articles have analyzed optimal fiscal policies in economies with tax evasion. All share a feature: they assume that the cost of enforcing the tax law is exogenous. However, governments often invest resources to reduce these enforcement costs. In a very simple model, we incorporate such investments in the analysis of an optimal fiscal policy. We characterize their optimal level and we show numerically how they interact with the other dimensions of the optimal fiscal policy. Finally, we highlight the differences between our results and those obtained in a model without investment in the tax administration. [source] Debt and Deficit Ceilings, and Sustainability of Fiscal Policies: an Intertemporal AnalysisOXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 2 2000Merih Uctum First page of article [source] Plebiscites, Fiscal Policy and the Poor: Learning from US Experience with Direct DemocracyDEVELOPMENT POLICY REVIEW, Issue 5 2005Arthur A. Goldsmith Many countries are contemplating direct political participation as a way of giving marginalised people more say in national fiscal policies. The United States is a natural laboratory for studying how large-scale direct democracy actually works in this regard. Every state allows voters to decide certain ballot questions about how to raise and spend public revenue. The 100-year record shows, however, that state-wide plebiscites fail to produce uniformly equitable or financially sustainable government budgets, or to mobilise low-income groups to defend their economic interests. When called upon to make decisions about state government spending, the electorate is apt to disregard any hardship for poor people. Traditional political parties and advocacy organisations are usually a more promising avenue for promoting anti-poverty budgets. [source] Fiscal Policy in the UKECONOMIC OUTLOOK, Issue 3 2001Brian Henry Although the conduct of macroeconomic policy in the UK has been very good by historical standards, Brian Henry argues in this article that there are shortcomings in the framework which mean it is less well suited to adverse shocks than it should be. He recommends that an extension of the present framework be made setting up a committee charged with the independent assessment of fiscal policy. This would help mitigate the lack of balance between monetary and fiscal policy which is evident at present. Fiscal judgements based on cyclical adjustments are too heavily dependant on domestic factors and underestimate the effects of the cycle on revenues. In consequence, fiscal policy, rather than supporting monetary, has been loosened and this indirectly accounts for the continuing strength of the exchange rate. [source] Long-Term Effects of Fiscal Policy on the Size and Distribution of the Pie in the UK,FISCAL STUDIES, Issue 3 2008Xavier Ramos C5; E6; H3 Abstract. This paper provides a joint analysis of the output and distributional long-term effects of various fiscal policies in the UK, using a vector autoregression (VAR) approach. Our findings suggest that the long-term impact on GDP of increasing public spending and taxes is negative, and especially strong in the case of current expenditure. We also find significant distributional effects associated with fiscal policies, indicating that an increase in public spending reduces inequality while a rise in indirect taxes increases income inequality. [source] Fiscal Policy, Business Cycles and Economic Stabilisation: Evidence from Industrialised and Developing Countries,FISCAL STUDIES, Issue 4 2007Young Lee This paper empirically investigates the responsiveness of fiscal policy to business cycles and the effectiveness of fiscal policy in reducing economic fluctuations. From regressions on the responsiveness of fiscal policy to business cycles, we find that the government's current expenditures and subsidies & transfers move counter-cyclically, whereas taxes and capital expenditures move pro-cyclically. Using economic fluctuations in neighbouring countries as an instrumental variable, we show that ordinary least squares (OLS) estimates understate the responsiveness of fiscal policy to economic fluctuations. We also find that fiscal policy responds asymmetrically over economic fluctuations. In investigating the effectiveness of fiscal policy in reducing economic fluctuations, we mitigate omitted variable bias by adding four important factors - military expenditures, oil production, economic fluctuations in neighbouring countries and fiscal policy responsiveness to business cycles. The results of effectiveness regressions are consistent with the responsiveness regressions, highlighting the importance of current expenditures, especially subsidies and transfers, in responding to business cycles and stabilising the economy. [source] Fiscal Policy and UncertaintyINTERNATIONAL FINANCE, Issue 2 2002Alan J. Auerbach Government fiscal aggregates are often manipulated over the course of the business cycle in order to provide counter,cyclical stimulus. Changes that are not discretionary , the so,called ,built,in stabilizers', also significantly vary over the business cycle, in a manner that is even more predicatable than the periodic discretionary measures. Such measures introduce important bi,directional interactions between policy and uncertainty. On the one hand, activist policy may heighten the general level of uncertainty in the economy, by adding policy ambiguity to the more fundamental sources of uncertainty. On the other hand, the design of optimal policy itself depends crucially on levels of uncertainty concerning the state of the economy in the short and long run. In this paper we review recent work that explores the impact of uncertainty on optimal policy design, proceeding from the short to the long run. [source] Fiscal Policy without a State in EMU?JCMS: JOURNAL OF COMMON MARKET STUDIES, Issue 2 2009By J. Kaarlejärvi, Germany, Growth Pact, Policy Co-ordination, the Stability No abstract is available for this article. [source] Assessing Effective Sustainability of Fiscal Policy within the G,7OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 2 2000Patrick Feve First page of article [source] Fiscal Policy and Presidential Elections: Update and ExtensionPRESIDENTIAL STUDIES QUARTERLY, Issue 2 2000ALFRED G. CUZÁN This article updates, deepens, and extends previous articles published in this journal on the relation between fiscal policy and presidential elections. It presents evidence that is consistent with the view that voters reward fiscal frugality and punish fiscal expansion. The relationship is robust with respect to economic conditions, presidential incumbency, number of consecutive terms in the White House by presidents of the same party, and war. An intriguing finding is that, when fiscal policy is controlled for, incumbency advantage practically disappears. It is hoped that these findings will stimulate more political scientists, especially students of the presidency, to pay more attention to the role of fiscal policy in presidential elections. [source] Accrual Budgeting: Accounting Treatment of Key Public Sector Items and Implications for Fiscal PolicyPUBLIC BUDGETING AND FINANCE, Issue 2 2006CARIDAD MARTÍ Budgeting in accrual terms is one of the most controversial issues in public sector accounting. In this paper, we analyze the accounting treatment of problematic elements of the financial statements when introducing accrual budgeting, and discuss the effects of the analyzed accounting alternatives on fiscal policy. We focus on three pioneer countries in the implementation of accrual budgeting and accounting: the United Kingdom, Sweden, and New Zealand. The accounting standards of the International Public Sector Accounting Standards Board, the European System of Accounts, and the Government Finance Statistics Manual of the International Monetary Fund are taken as benchmarks. [source] A Decade of Deficits and Debt: Japanese Fiscal Policy and the Rise and Fall of the Fiscal Structural Reform Act of 1997PUBLIC BUDGETING AND FINANCE, Issue 1 2000James D. Savage Japanese budgetary and fiscal policy have experienced dramatic changes during the last several years, marked by the rise and fall of the Fiscal Structural Reform Act of 1997. This act altered the budgetary process with the goal of reducing Japan's rapidly growing deficit and debt. Yet the onset of recession in 1998 led Japan to engage again in large-scale deficit spending to stimulate the economy, and in the process discard its budget reforms. [source] Endogenous Markups and Fiscal PolicyTHE MANCHESTER SCHOOL, Issue 2004Luís F. Costa This paper analyses a simple imperfectly competitive general equilibrium model where the entry mechanism generates an endogenous markup. In this second-best world fiscal policy is more effective than in Walrasian or in fixed-markup monopolistic competition models, as it produces efficiency gains through entry. [source] Fiscal Policy and Management in East AsiaAUSTRALIAN ECONOMIC HISTORY REVIEW, Issue 2 2009John Singleton No abstract is available for this article. [source] Effectiveness of Fiscal Policy in a Model of Imperfect Competition With Transactions MoneyAUSTRALIAN ECONOMIC PAPERS, Issue 1 2000Hassan Molana This paper examines the effectiveness of fiscal policy in a general equilibrium macromodel with transactions money and an oligopolistic product market. The results suggest that although money may be neutral and play no direct role as a policy instrument, its indirect impact on the effectiveness of fiscal policy can be quite substantial. In particular, when money balances feature as a choice variable in the households' objective function, (i) fiscal policy becomes ineffective as the weight attached to money is reduced; (ii) the fiscal multiplier becomes negative when the elasticity of substitution between money and leisure exceeds unity; and (iii) it is possible that policy effects are in fact enhanced as the product market becomes more competitive. [source] Fiscal policy and interest rates in EuropeECONOMIC POLICY, Issue 47 2006Riccardo Faini SUMMARY Fiscal policy and interest rates in Europe The appetite for fiscal discipline has been steadily declining among most industrial countries. In the past, fiscal profligacy would have been punished by markets with higher interest rates and, in some cases, also exchange rate depreciation. However, in post-EMU Europe, exchange rate markets no longer discipline the fiscal behaviour of national governments. Perhaps more crucially, even the interest rate punishment to fiscal indiscipline is highly uncertain, with academic opinions being quite divided on this issue. This paper takes a close look at the link between fiscal policy and interest rates in the European context. The key finding is that an expansionary fiscal policy in one EMU member will have an effect both on its spreads and on the overall level of interest rates for the currency union as a whole, with the second effect, however, being quantitatively much more significant. This suggests that there are indeed substantial spillovers, through the interest rate channel, among fiscal policies of member countries. To limit countries' incentive to run expansionary fiscal policies, a set of rules, like those embedded in the Stability and Growth Pact, is then needed. Some (weak) evidence is also found that after EMU, interest rate spillovers seem to be more significant for high debt countries with unsustainable fiscal policies, reflecting perhaps market concerns about a possible sovereign bail out or the impact of financial distress. There may be a case then for imposing tighter rules on high debt countries. , Riccardo Faini [source] The Political Economy of Shock TherapyJOURNAL OF ECONOMIC SURVEYS, Issue 1 2002John Marangos The collapse of the centrally administered economies gave rise to a transition process towards economic systems based on market relations. Nevertheless, the transition process is not restricted to the economic field. The political and ideological aspects of the transformation are fundamental. As such an analysis of the shock therapy model requires the exposition of what I define the primary elements of the shock therapy model which are: 1) The body of economic analysis used by the shock therapy model. 2) What structure of society the shock therapy model desires to achieve? 3) The speed of the reforms. 4) The political structure consistent with the model. 5) The consistent ideological structure. After the identification of the primary elements of the shock therapy model the next'step'is to identify secondary elements, the desired changes with respect to: 1) 'Price liberalisation,stabilisation. 2) Privatisation. 3) Institutional structure. 4) 'Monetary policy. 5) Fiscal policy. 6) International trade and Foreign Aid. 7) 'Social policy. The analytical framework developed makes possible to understand the shock therapy model from a new and more enlightening perspective. We are better able to comprehend the complexities involved and the disagreements about the reform process. [source] Fiscal policy and structural reforms in transition economiesTHE ECONOMICS OF TRANSITION, Issue 1 2001An 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] 330 , Fiscal policy, budget expenditure and revenueASIAN-PACIFIC ECONOMIC LITERATURE, Issue 1 2002Article first published online: 9 OCT 200 No abstract is available for this article. [source] Plebiscites, Fiscal Policy and the Poor: Learning from US Experience with Direct DemocracyDEVELOPMENT POLICY REVIEW, Issue 5 2005Arthur A. Goldsmith Many countries are contemplating direct political participation as a way of giving marginalised people more say in national fiscal policies. The United States is a natural laboratory for studying how large-scale direct democracy actually works in this regard. Every state allows voters to decide certain ballot questions about how to raise and spend public revenue. The 100-year record shows, however, that state-wide plebiscites fail to produce uniformly equitable or financially sustainable government budgets, or to mobilise low-income groups to defend their economic interests. When called upon to make decisions about state government spending, the electorate is apt to disregard any hardship for poor people. Traditional political parties and advocacy organisations are usually a more promising avenue for promoting anti-poverty budgets. [source] Spanish merino wools and the nouvelles draperies: an industrial transformation in the late medieval Low Countries1ECONOMIC HISTORY REVIEW, Issue 3 2005JOHN MUNRO From the seventeenth century, the world's finest wools have been those produced by descendants of the Spanish merino. During the middle ages, however, England produced Europe's finest wools. Not until the fourteenth century does a distinct merino breed appear in Spain; and, before then, 'Spanish' wools were amongst the very worst in Europe, used in the production of only the very cheapest fabrics. By the late fourteenth century, some merino wools were being used in some Italian draperies; but, in the north, long-held historic prejudices against 'Spanish' wools hindered their introduction, especially into the Low Countries' draperies, which, because of structural changes in international trade, had become re-oriented to manufacturing luxury woollens, most woven from the finest English wools. From the 1420s, however, disastrous changes in England's fiscal policies so increased the cost of these exported wools that many of the younger Flemish draperies, the so-called nouvelles draperies, producing imitations of the finer woollens from the older established draperies, decided to switch to Spanish merino wools (often mixed with English wools). By the mid-fifteenth century, the merinos had indeed improved enough in quality to rival at least the mid-range English wools. Most of the traditional draperies, however, did not adopt merino wools until much too late, and thus, by the early sixteenth century found themselves displaced by the nouvelle draperies as the leading cloth manufacturers in the Low Countries. [source] Equilibrium Determinacy under Monetary and Fiscal Policies in an Overlapping Generations ModelECONOMIC NOTES, Issue 3 2005Alessandro Piergallini This paper studies the issue of equilibrium determinacy under monetary and fiscal policy feedback rules in an optimizing general equilibrium model with overlapping generations and flexible prices. It is shown that equilibria may be determinate also when monetary and fiscal policies are both ,passive'. In particular, under passive monetary rules, equilibrium uniqueness is more likely to be verified when fiscal policies are less committed to public debt stabilization. [source] Greek Monetary Economics in Retrospect: The Adventures of the DrachmaECONOMIC NOTES, Issue 3 2005Sophia Lazaretou This paper enumerates the adventures of the drachma step by step, dividing its story into seven parts. Specifically, its main purpose is to present some historical perspective on the behaviour of the monetary and fiscal policies pursued in Greece during the period from the early 1830s until the introduction of the euro. For Greece, the lessons of historical experience are very important. Since the formation of the modern Greek state, government officials have striven , sometimes making hard efforts , to keep abreast of international monetary developments. This was because they understood that the participation of a peripheral, poor and inflation-prone country with a weak currency and an underdeveloped money market, like Greece of the time, in a monetary club of powerful economies could improve her international credit standing and imply important benefits in terms of exchange rate and monetary stability, and long-term foreign borrowing. [source] Fiscal policy and interest rates in EuropeECONOMIC POLICY, Issue 47 2006Riccardo Faini SUMMARY Fiscal policy and interest rates in Europe The appetite for fiscal discipline has been steadily declining among most industrial countries. In the past, fiscal profligacy would have been punished by markets with higher interest rates and, in some cases, also exchange rate depreciation. However, in post-EMU Europe, exchange rate markets no longer discipline the fiscal behaviour of national governments. Perhaps more crucially, even the interest rate punishment to fiscal indiscipline is highly uncertain, with academic opinions being quite divided on this issue. This paper takes a close look at the link between fiscal policy and interest rates in the European context. The key finding is that an expansionary fiscal policy in one EMU member will have an effect both on its spreads and on the overall level of interest rates for the currency union as a whole, with the second effect, however, being quantitatively much more significant. This suggests that there are indeed substantial spillovers, through the interest rate channel, among fiscal policies of member countries. To limit countries' incentive to run expansionary fiscal policies, a set of rules, like those embedded in the Stability and Growth Pact, is then needed. Some (weak) evidence is also found that after EMU, interest rate spillovers seem to be more significant for high debt countries with unsustainable fiscal policies, reflecting perhaps market concerns about a possible sovereign bail out or the impact of financial distress. There may be a case then for imposing tighter rules on high debt countries. , Riccardo Faini [source] Fiscal Policy Coordination and International TradeECONOMICA, Issue 294 2007TORBEN M. ANDERSEN While assertions are often made that non-cooperative fiscal policies suffer a contractionary bias, general equilibrium models have shown that the bias is unambiguously expansionary. This paper argues that the latter result relies on a particular and critical way of modelling international trade, and that under a more plausible trade structure, it is possible that fiscal policy is insufficiently expansionary in the non-cooperative case. Non-cooperative policy-making thus implies that fiscal policies are used too little if they expand private employment, and too much if they contract private employment. Inefficiencies in non-cooperative fiscal policies worsen when product markets become more integrated. [source] FISCAL DECENTRALIZATION AND THE BUSINESS CYCLE: AN EMPIRICAL STUDY OF SEVEN FEDERATIONSECONOMICS & POLITICS, Issue 1 2010JONATHAN RODDEN Although fiscal policies of central governments sometimes provide modest insurance against regional income shocks, this paper shows that procyclical fiscal policy among provincial governments can easily overwhelm these stabilizing effects. We examine the cyclicality of budget items among provincial governments in seven federations, showing that own-source taxes are generally highly procyclical, and contrary to common wisdom, revenue sharing and discretionary transfers are either acyclical or procyclical. Constituent governments are thus left alone to smooth their own shocks, and we document the extent to which various restraints on borrowing and saving undermine their ability to do so. The resulting procyclicality of provincial fiscal policy is likely to have important implications in a world where demands for countercyclical fiscal policy are increasing but considerable fiscal responsibilities are being devolved to subnational governments. [source] | ||||||||||||||||||||||||||||