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| Author | : Alberto Alesina |
| Publisher | : University of Chicago Press |
| Total Pages | : 596 |
| Release | : 2013-06-25 |
| Genre | : Business & Economics |
| ISBN | : 022601844X |
Download Fiscal Policy after the Financial Crisis Book in PDF, ePub and Kindle
The recent recession has brought fiscal policy back to the forefront, with economists and policy makers struggling to reach a consensus on highly political issues like tax rates and government spending. At the heart of the debate are fiscal multipliers, whose size and sensitivity determine the power of such policies to influence economic growth. Fiscal Policy after the Financial Crisis focuses on the effects of fiscal stimuli and increased government spending, with contributions that consider the measurement of the multiplier effect and its size. In the face of uncertainty over the sustainability of recent economic policies, further contributions to this volume discuss the merits of alternate means of debt reduction through decreased government spending or increased taxes. A final section examines how the short-term political forces driving fiscal policy might be balanced with aspects of the long-term planning governing monetary policy. A direct intervention in timely debates, Fiscal Policy after the Financial Crisis offers invaluable insights about various responses to the recent financial crisis.
| Author | : Carlos Montes-Galdon |
| Publisher | : |
| Total Pages | : 34 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download Are Fiscal Multipliers Larger During Recessions? Book in PDF, ePub and Kindle
This paper estimates how fiscal multipliers have changed over time using a time varying parameter model vector autorregressive model with stochastic volatility (TVPSV-VAR). First, I find that there is significant evidence that the multiplier has changed over time, once we control for changes in volatility, but that there is no empirical support to claim that the fiscal multiplier is bigger during a recession even if we consider different components of government spending. Second, I show that stochastic volatility plays an important role in the estimation of the model, and therefore, it should be taken into account when estimating VARs that include government spending or output. Finally, I show that government spending was extremely ineffective during the Great Recession of 2008, but taxes and transfer payments played an important role to stabilize the economy.
| Author | : Ethan Ilzetzki |
| Publisher | : International Monetary Fund |
| Total Pages | : 68 |
| Release | : 2011-03-01 |
| Genre | : Business & Economics |
| ISBN | : 1455218022 |
Download How Big (Small?) are Fiscal Multipliers? Book in PDF, ePub and Kindle
We contribute to the intense debate on the real effects of fiscal stimuli by showing that the impact of government expenditure shocks depends crucially on key country characteristics, such as the level of development, exchange rate regime, openness to trade, and public indebtedness. Based on a novel quarterly dataset of government expenditure in 44 countries, we find that (i) the output effect of an increase in government consumption is larger in industrial than in developing countries, (ii) the fisscal multiplier is relatively large in economies operating under predetermined exchange rate but zero in economies operating under flexible exchange rates; (iii) fiscal multipliers in open economies are lower than in closed economies and (iv) fiscal multipliers in high-debt countries are also zero.
| Author | : Alberto Alesina |
| Publisher | : Princeton University Press |
| Total Pages | : 290 |
| Release | : 2020-12 |
| Genre | : Business & Economics |
| ISBN | : 0691208638 |
Download Austerity Book in PDF, ePub and Kindle
A revealing look at austerity measures that succeed—and those that don't Fiscal austerity is hugely controversial. Opponents argue that it can trigger downward growth spirals and become self-defeating. Supporters argue that budget deficits have to be tackled aggressively at all times and at all costs. Bringing needed clarity to one of today's most challenging economic issues, three leading policy experts cut through the political noise to demonstrate that there is not one type of austerity but many. Austerity assesses the relative effectiveness of tax increases and spending cuts at reducing debt, shows that austerity is not necessarily the kiss of death for political careers as is often believed, and charts a sensible approach based on data analysis rather than ideology.
| Author | : Mr.Salvatore Dell'Erba |
| Publisher | : International Monetary Fund |
| Total Pages | : 42 |
| Release | : 2014-12-05 |
| Genre | : Business & Economics |
| ISBN | : 1498336191 |
Download Medium-Term Fiscal Multipliers during Protracted Recessions Book in PDF, ePub and Kindle
The paper examines the consequences of fiscal consolidation in times of persistently low growth and high unemployment by estimating medium-term fiscal multipliers during protracted recessions (PR) in a sample of 17 OECD countries. Based on Jorda’s (2005) local projection methodology, we find that cumulative fiscal multipliers related to output, employment and unemployment at five-year horizons are significantly above one during PR episodes. These results suggest that medium-term fiscal consolidation plans to reduce public debt burdens should proceed gradually if economic activity remains below trend for a prolonged period.
| Author | : George A. Akerlof |
| Publisher | : MIT Press |
| Total Pages | : 369 |
| Release | : 2016-09-02 |
| Genre | : Business & Economics |
| ISBN | : 0262529858 |
Download What Have We Learned? Book in PDF, ePub and Kindle
Top economists consider how to conduct policy in a world where previous beliefs have been shattered by the recent financial and economic crises. Since 2008, economic policymakers and researchers have occupied a brave new economic world. Previous consensuses have been upended, former assumptions have been cast into doubt, and new approaches have yet to stand the test of time. Policymakers have been forced to improvise and researchers to rethink basic theory. George Akerlof, Nobel Laureate and one of this volume's editors, compares the crisis to a cat stuck in a tree, afraid to move. In April 2013, the International Monetary Fund brought together leading economists and economic policymakers to discuss the slowly emerging contours of the macroeconomic future. This book offers their combined insights. The editors and contributors—who include the Nobel Laureate and bestselling author Joseph Stiglitz, Federal Reserve Vice Chair Janet Yellen, and the former Governor of the Bank of Israel Stanley Fischer—consider the lessons learned from the crisis and its aftermath. They discuss, among other things, post-crisis questions about the traditional policy focus on inflation; macroprudential tools (which focus on the stability of the entire financial system rather than of individual firms) and their effectiveness; fiscal stimulus, public debt, and fiscal consolidation; and exchange rate arrangements.
| Author | : Richard Hemming |
| Publisher | : International Monetary Fund |
| Total Pages | : 62 |
| Release | : 2002-12 |
| Genre | : Business & Economics |
| ISBN | : |
Download The Effectiveness of Fiscal Policy in Stimulating Economic Activity Book in PDF, ePub and Kindle
This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.
| Author | : Matthew B. Canzoneri |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2015 |
| Genre | : Business cycles |
| ISBN | : |
Download Fiscal Multipliers in Recessions Book in PDF, ePub and Kindle
The Great Recession, and the fiscal response to it, has revived interest in the size of fiscal multipliers. Standard business cycle models have difficulties generating multipliers greater than one. And they also cannot produce any significant state-dependence in the size of the multipliers over the business cycle. In this paper we employ a variant of the Curdia-Woodford model of costly financial intermediation and show that fiscal multipliers can be strongly state dependent in a countercyclical manner. In particular, a fiscal expansion during a recession may lead to multiplier values exceeding two, while a similar expansion during an economic boom would produce multipliers falling short of unity. This pattern obtains if the spread (the financial friction) is more sensitive to fiscal policy during recessions than during expansions, a feature that is present in the data. Our results are consistent with recent empirical work documenting the state contingency of multipliers.
| Author | : Ms.Anja Baum |
| Publisher | : International Monetary Fund |
| Total Pages | : 31 |
| Release | : 2012-12-05 |
| Genre | : Business & Economics |
| ISBN | : 1475523920 |
Download Fiscal Multipliers and the State of the Economy Book in PDF, ePub and Kindle
Only a few empirical studies have analyzed the relationship between fiscal multipliers and the underlying state of the economy. This paper investigates this link on a country-by-country basis for the G7 economies (excluding Italy). Our results show that fiscal multipliers differ across countries, calling for a tailored use of fiscal policy. Moreover, the position in the business cycle affects the impact of fiscal policy on output: on average, government spending, and revenue multipliers tend to be larger in downturns than in expansions. This asymmetry has implications for the choice between an upfront fiscal adjustment versus a more gradual approach.
| Author | : Mr.Olivier J. Blanchard |
| Publisher | : International Monetary Fund |
| Total Pages | : 43 |
| Release | : 2013-01-03 |
| Genre | : Business & Economics |
| ISBN | : 1475576447 |
Download Growth Forecast Errors and Fiscal Multipliers Book in PDF, ePub and Kindle
This paper investigates the relation between growth forecast errors and planned fiscal consolidation during the crisis. We find that, in advanced economies, stronger planned fiscal consolidation has been associated with lower growth than expected, with the relation being particularly strong, both statistically and economically, early in the crisis. A natural interpretation is that fiscal multipliers were substantially higher than implicitly assumed by forecasters. The weaker relation in more recent years may reflect in part learning by forecasters and in part smaller multipliers than in the early years of the crisis.
