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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 | : Alan J. Auerbach |
| Publisher | : |
| Total Pages | : 35 |
| Release | : 2011 |
| Genre | : Government spending policy |
| ISBN | : |
Download Fiscal Multipliers in Recession and Expansion Book in PDF, ePub and Kindle
In this paper, we estimate government purchase multipliers for a large number of OECD countries, allowing these multipliers to vary smoothly according to the state of the economy and using real-time forecast data to purge policy innovations of their predictable components. We adapt our previous methodology (Auerbach and Gorodnichenko, 2011) to use direct projections rather than the SVAR approach to estimate multipliers, to economize on degrees of freedom and to relax the assumptions on impulse response functions imposed by the SVAR method. Our findings confirm those of our earlier paper. In particular, GDP multipliers of government purchases are larger in recession, and controlling for real-time predictions of government purchases tends to increase the estimated multipliers of government purchases in recession. We also consider the responses of other key macroeconomic variables and find that these responses generally vary over the cycle as well, in a pattern consistent with the varying impact on GDP -- National Bureau of Economic Research web site.
| 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 | : 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.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 | : 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.
| Author | : Daniel Riera-Crichton |
| Publisher | : |
| Total Pages | : 35 |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
Download Fiscal Multipliers in Recessions and Expansions Book in PDF, ePub and Kindle
Using non-linear methods, this paper finds that existing estimates of government spending multipliers in expansion and recession may yield biased results by ignoring whether government spending is increasing or decreasing. For industrial countries, the problem originates in the fact that, contrary to one's priors, it is not always the case that government spending is going up in recessions (i.e., acting countercyclically). In almost as many cases, government spending is actually going down (i.e., acting procyclically). Since the economy does not respond symmetrically to government spending increases or decreases, the "true" long-run multiplier for bad times (and government spending going up) turns out to be 2.3 compared to 1.3 if we just distinguish between recession and expansion. In the case of developing countries, the bias results from the fact that the multiplier for recessions and government spending going down (the "when-it-rains-it-pours" phenomenon) is larger than when government spending is going up.
| 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 | : Daniel Riera-Crichton |
| Publisher | : |
| Total Pages | : 32 |
| Release | : 2014 |
| Genre | : Fiscal policy |
| ISBN | : |
Download Procyclical and Countercyclical Fiscal Multipliers Book in PDF, ePub and Kindle
Using non-linear methods, we argue that existing estimates of government spending multipliers in expansion and recession may yield biased results by ignoring whether government spending is increasing or decreasing. In the case of OECD countries, the problem originates in the fact that, contrary to one's priors, it is not always the case that government spending is going up in recessions (i.e., acting countercyclically). In almost as many cases, government spending is actually going down (i.e., acting procyclically). Since the economy does not respond symmetrically to government spending increases or decreases, the "true" long-run multiplier for bad times (and government spending going up) turns out to be 2.3 compared to 1.3 if we just distinguish between recession and expansion. In extreme recessions, the long-run multiplier reaches 3.1.
| 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.
