Download or read book Expansionary Austerity New International Evidence written by Mr.Daniel Leigh and published by International Monetary Fund. This book was released on 2011-07-01 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the short-term effects of fiscal consolidation on economic activity in OECD economies. We examine the historical record, including Budget Speeches and IMFdocuments, to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions. Using this new dataset, our estimates suggest fiscal consolidation has contractionary effects on private domestic demand and GDP. By contrast, estimates based on conventional measures of the fiscal policy stance used in the literature support the expansionary fiscal contractions hypothesis but appear to be biased toward overstating expansionary effects.
Download or read book Expansionary Fiscal Austerity written by Owen Nie and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The expansionary fiscal contraction (EFC) hypothesis states that fiscal austerity can increase output or consumption when a country is under heavy debt burdens because it sends positive signal about the country's solvency situation and long-term economic wellbeing. Empirical tests of this hypothesis have suffered from identification concerns due to data sources and empirical methodology. Using a sample of OECD countries between 1978 and 2014, this paper combines new IMF narrative data and the proxy structural Vector Auto-regression (SVAR) method to examine whether fiscal austerities can be expansionary when debt levels are high. Fiscal austerities are measured as 1) narrative fiscal shocks and 2) structural shocks from a proxy SVAR. Additionally, this paper uses a model-based approach to determine the cutoff debt level beyond which EFC is expected to be observed. This paper finds empirical evidence in support of the EFC hypothesis for OECD countries: results for output are driven by changes in tax rates and are robust to how one defines a high-debt regime and how one measures austerity.
Download or read book Austerity written by Alberto Alesina and published by Princeton University Press. This book was released on 2020-12 with total page 290 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Fiscal Adjustments in OECD Countries written by Mr.Alberto Alesina and published by International Monetary Fund. This book was released on 1996-07-01 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies how the composition of fiscal adjustments influences their likelihood of “success”, defined as a long lasting deficit reduction, and their macroeconomic consequences. We find that fiscal adjustments which rely primarily on spending cuts on transfers and the government wage bill have a better chance of being successful and are expansionary. On the contrary fiscal adjustments which rely primarily on tax increases and cuts in public investment tend not to last and are contractionary. We discuss alterative explanations for these findings by studying both a full sample of OECD countries and by focusing on three case studies: Denmark, Ireland and Italy.
Download or read book The Effectiveness of Fiscal Policy in Stimulating Economic Activity written by Richard Hemming and published by International Monetary Fund. This book was released on 2002-12 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book The Predator State written by James Galbraith and published by Simon and Schuster. This book was released on 2008-08-05 with total page 243 pages. Available in PDF, EPUB and Kindle. Book excerpt: A progressive economist challenges popular conservative-minded economic practices, in a scathing critique of Reagan-Bush policies that contends that the political right is misrepresenting the consequences of free-market and free-trade ideals. 50,000 first printing.
Download or read book Austerity written by Mark Blyth and published by Oxford University Press. This book was released on 2015 with total page 305 pages. Available in PDF, EPUB and Kindle. Book excerpt: In Austerity: The History of a Dangerous Idea, Mark Blyth, a renowned scholar of political economy, provides a powerful and trenchant account of the shift toward austerity policies by governments throughout the world since 2009. The issue is at the crux about how to emerge from the Great Recession, and will drive the debate for the foreseeable future.
Download or read book The Austerity State written by Stephen McBride and published by University of Toronto Press. This book was released on 2017-09-18 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt: The fall-out from the economic and financial crisis of 2008 had profound implications for countries across the world, leading different states to determine the best approach to mitigating its effects. In The Austerity State, a group of established and emerging scholars tackles the question of why states continue to rely on policies that, on many levels, have failed. After 2008, austerity policies were implemented in various countries, a fact the contributors link to the persistence of neoliberalism and its accepted wisdoms about crisis management. In the immediate aftermath of the 2008 collapse, governments and central banks appeared to adopt a Keynesian approach to salvaging the global economy. This perception is mistaken, the authors argue. The “austerian” analysis of the crisis is ahistorical and shifts the blame from the under-regulated private sector to public, or sovereign, debt for which public authorities are responsible. The Austerity State provides a critical examination of the accepted discourse around austerity measures and explores the reasons behind its continued prevalence in the world.
Download or read book The Rise in Inequality After Pandemics Can Fiscal Support Play a Mitigating Role written by Davide Furceri and published by International Monetary Fund. This book was released on 2021-04-30 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Major epidemics of the last two decades (SARS, H1N1, MERS, Ebola and Zika) have been followed by increases in inequality (Furceri, Loungani, Ostry and Pizzuto, 2020). In this paper, we show that the extent of fiscal consolidation in the years following the onset of these pandemics has played an important role in determining the extent of the increase in inequality. Episodes marked by extreme austerity—measured using either the government’s fiscal balance, health expenditures or redistribution—have been associated with an increase in the Gini measure of inequality three times as large as in episodes where fiscal policy has been more supportive. We survey the evidence thus far on the distributional impacts of the COVID-19 pandemic, which suggests that inequality is likely to increase in the absence of strong policy actions. We review the case made by many observers (IMF 2020; Stiglitz 2020; Sandbu 2020b) that fiscal support should not be withdrawn prematurely despite understandable concerns about high public debt-to-GDP ratios.
Download or read book The Rise And Fall Of Global Austerity written by E Ray Canterbery and published by World Scientific. This book was released on 2014-12-15 with total page 313 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since its onset in late 2007, few expected the Great Recession to be protracted for over half a decade across the world. The Rise and Fall of Global Austerity explains the origins and history of austerity, severe implications of the idea of it and how the continuation of the Great Recession was a by-product of austerity measures. Covering austerity policies that are in place in the United States, Europe, and other countries, E Ray Canterbery explains why austerity is detrimental for economies, economic policy and the general health of populations around the world. He highlights the connection between public debt and austerity policies and shows how the austerity lobby works in the United States to achieve its goals. Besides presenting a critique of the rationale for austerity, Canterbery also recommends monetary, fiscal, and incomes policy remedies, and stresses why economic growth and full employment are more ideal and pragmatic antidotes to the Great Recession.
Download or read book Fiscal Policy after the Financial Crisis written by Alberto Alesina and published by University of Chicago Press. This book was released on 2013-06-25 with total page 596 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Hysteresis and Business Cycles written by Ms.Valerie Cerra and published by International Monetary Fund. This book was released on 2020-05-29 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Download or read book How Big Small are Fiscal Multipliers written by Ethan Ilzetzki and published by International Monetary Fund. This book was released on 2011-03-01 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book The Changing Politics and Policy of Austerity written by Stephen McBride and published by Policy Press. This book was released on 2021-09-30 with total page 326 pages. Available in PDF, EPUB and Kindle. Book excerpt: This collection of original essays explores the myriad expressions of austerity since the 2008 financial crisis. Case studies drawn from Canada, Australia and the European Union provide extensive comparative analysis of fiscal consolidation and the varied political responses against austerity. Contributions examine such themes as privatization, class mobilization and resistance, the crisis of liberal democracy and the rise of the far right. The potential impact of the COVID-19 pandemic in shaping future austerity and alternatives is signalled. Given the rapidly shifting terrain, this comprehensive handbook provides important insights into a complex and fast-changing period of politics and policy.
Download or read book Cross Country Experience in Reducing Net Foreign Liabilities written by Ding Ding and published by International Monetary Fund. This book was released on 2014-04-16 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the dynamics of net foreign liabilities across a number of countries. Our historical analysis suggests that an orderly reduction in a country’s net foreign liabilities has mostly occurred when there was significant improvement in gross public savings through deliberate fiscal consolidation measures. Simulations of a dynamic general equilibrium model calibrated for New Zealand indicates that sustained government deficit reduction could improve the country’s net foreign assets by about half of the accumulated public savings. However, given New Zealand’s relatively strong fiscal positions and previous work noting structurally low household savings, an orderly improvement in New Zealand’s external position in the medium term will depend on a structural improvement in private savings.
Download or read book Managing the Euro Area Debt Crisis written by William R. Cline and published by Peterson Institute for International Economics. This book was released on 2014-06-09 with total page 342 pages. Available in PDF, EPUB and Kindle. Book excerpt: First came the financial and debt crisis in Greece, then government financing difficulties and rescue programs in Ireland in 2010 and Portugal in 2011. Before long, Italy and Spain were engulfed by financial contagion as well. Finally in 2012, the European Central Bank pledged to do "whatever it takes" to preserve the euro area with purchases of government bonds, a step that achieved impressive results, according to William R. Cline in this important new book. One of the world's leading experts on fiscal and debt issues, Cline mobilizes meticulously researched and forceful arguments to trace the history of the euro area debt crisis and makes projections of future debt sustainability. He argues that euro area leaders made the right decision to keep the euro from breaking apart but warns against complacency about the future. Cline contends that troubled European economies should continue their fiscal consolidation but that further debt restructurings for most countries are not called for. Greece is a special case and may need some further debt relief contingent on continued progress on fiscal and structural reform, however. In this landmark study, Cline offers a detailed analysis of the mistakes, successes, and options for Europe as it struggles to overcome its worst economic disaster since World War II.
Download or read book The Distributional Effects of Fiscal Consolidation written by Laurence M. Ball and published by International Monetary Fund. This book was released on 2013-06-21 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the distributional effects of fiscal consolidation. Using episodes of fiscal consolidation for a sample of 17 OECD countries over the period 1978–2009, we find that fiscal consolidation has typically had significant distributional effects by raising inequality, decreasing wage income shares and increasing long-term unemployment. The evidence also suggests that spending-based adjustments have had, on average, larger distributional effects than tax-based adjustments.
