Download or read book Can Severe Fiscal Contractions be Expansionary written by Francesco Giavazzi and published by . This book was released on 1990 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: According to conventional wisdom, a fiscal consolidation is likely to contract real aggregate demand. It has often been argued, however, that this conclusion is misleading as it neglects the role of expectations of future policy: if the fiscal consolidation is read by the private sector as a signal that the share of government spending in GDP is being permanently reduced, households will revise upwards their estimate of their permanent income, and will raise current and planned consumption. Only the empirical evidence can sort out which of these two contending views about fiscal policy is more appropriate -- i.e how often the contractionary effect of a fiscal consolidation prevails on its expansionary expectational effect. This paper brings new evidence to bear on this issue drawing on the European exercise in fiscal rectitude of the 1980s, and focusing, in particulars on its two most extreme cases -- Denmark and Ireland. We find that at least in the experience of these two countries the expectations' view has a serious claim to empirical relevance.

Download or read book Expansionary Fiscal Contractions Evidence from Panel Data written by Vincent Hogan and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the ability of the expansionary fiscal contraction (EFC) hypothesis to explain the performance of OECD economies during fiscal crises. We find some limited evidence in its favour: if public consumption is reduced in response to a fiscal crisis (as defined by a high level of debt), private consumption does seem to increase. However, the size of the effect is smaller than that typically found in other studies. Furthermore, the increase in private consumption is usually not sufficient to offset the direct effect of a reduction in public consumption on output - fiscal contractions are not literally expansionary.

Download or read book NBER Macroeconomics Annual 1990 written by Olivier Blanchard and published by MIT Press. This book was released on 1990 with total page 356 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is the fifth in a series of annuals from the National Bureau of EconomicResearch that are designed to stimulate research on problems in applied economics, to bring frontiertheoretical developments to a wider audience, and to accelerate the interaction between analyticaland empirical research in macroeconomics.Olivier Blanchard and Stanley Fischer are both Professorsof Economics at MIT.Contributors: Ricardo Caballero, Guiseppe Bertola. Andrew Caplin, Robert Hall.Gur Ofer. Abram Bergson, Martin Weitzman. Francesco Giavazzi, Marco Pagano. Allan Drazen, MartinFeldstein. Steven Davis, John Haltiwanger. Katharine Abraham, Robert Townsend. Mark Bils. AndrewOswald, Gary Hansen. Robert Barro, Xavier Sala i Martin. William Brainard, Robert Lucas.

Download or read book Expansionary Fiscal Contractions written by Vincent Hogan and published by . This book was released on 2001 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 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 Contraction written by Duncan Needham and published by Cambridge University Press. This book was released on 2014-09-15 with total page 269 pages. Available in PDF, EPUB and Kindle. Book excerpt: In its 1981 Budget, the Thatcher government discarded Keynesian counter-cyclical policies and cut Britain's public sector deficit in the depths of the worst UK recession since the 1930s. Controversially, the government argued that fiscal contraction would produce economic growth. In this specially commissioned volume, contributors examine recently released archives alongside firsthand accounts from key players within No. 10 Downing Street, HM Treasury and the Bank of England, to provide the first comprehensive treatment of this critical event in British economic history. They assess the empirical and theoretical basis for expansionary fiscal contraction, drawing clear parallels with contemporary debates on austerity in Europe, USA and Japan in the wake of the recent global financial crisis. This timely and thoughtful book will have broad appeal among economists, political scientists, historians and policy makers.

Download or read book In Praise of Expansionary Fiscal Contraction written by Tim Congdon and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Textbook orthodoxy maintains that increases in the cyclically adjusted budget balance (i.e. reductions in the deficit) withdraw demand from an economy. Those Keynesian economists who believe that fiscal policy is the most powerful single influence on changes in demand expect 'fiscal contraction' to be accompanied by below-trend growth or even declines in output. This article, a response to Martin Wolf's 2013 Wincott Memorial Lecture, considers this Keynesian view. Using a database prepared by the International Monetary Fund, it shows that since the 1980s 'expansionary fiscal contractions' have been the norm and not the exception in the USA and the UK. Keynesian support for fiscal activism is unsupported by a large body of recent evidence.

Download or read book The expansionary Fiscal Contraction Hypothesis and Uncertainty about the Permanence of Fiscal Consolidations written by Michael U. Bergman and published by . This book was released on 2000 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book An Examination of the expansionary Fiscal Contraction Hypothesis written by Frank Barry and published by . This book was released on 1992 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The expansionary Fiscal Contraction Hypothesis and Uncertainty about the Permanence of Fiscal Consolidations written by U. Michael Bergman and published by . This book was released on 2000 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Expansionary Fiscal Contraction in an Overlapping Generations Economy written by Frank Barry and published by . This book was released on 1996 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Expansionary Contractions and Fiscal Free Lunches written by Richard McManus and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper builds a framework to jointly examine the possibilities of both expansionary fiscal contractions (austerity increasing output) and fiscal free lunches (expansions reducing government debt), arguments which in recent debates have been supported by the austerity and stimulus camps, respectively. We propose a new metric quantifying the budgetary implications of fiscal action, a key aspect of fiscal policy particularly at the monetary zero lower bound. We find that austerity needs to be highly persistent and credible in order to be expansionary, and stimulus needs to be temporary, responsive, and well-targeted in order to lower debt. We conclude that neither is likely, especially during periods of economic distress.

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 Current Trends in Economics written by Ahmet Alkan and published by Springer Science & Business Media. This book was released on 2013-04-17 with total page 541 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 1990, the Society for the Advancement of Economic Theory (SAET) was founded with the main purpose to advance our knowledge in theoretical economics and to facilitate communication among researchers in economics, mathematics, game theory and any other field which is po tentially useful to economic theory. To achieve these goals, SAET sponsors the research journal Economic Theory published by Springer-Verlag and holds international conferences every other year. The first two conferences SAET took place in the island of Cephalonia, Greece, in the summers of of 1993 and 1995. In the summer of 1997, the conference was held in Antalya, Turkey. The twenty-nine papers in this volume are mostly by participants in the Antalya meeting of SAET and form a broad sample of the 150 papers pre sented there. Topics covered include cooperative and noncooperative games, social choice and welfare, bargaining, matchings, auctions, mechanism de sign, general equilibrium, general equilibrium with finance, industrial or ganization, macroeconomics, and experimental economics. We have chosen to present the papers according to the alphabetical order of first author names instead of grouping them by topic or theme. We have appended a complete listing of the sessions in the conference together with a list of program committee members and of sponsors at the end of the volume.

Download or read book The Paradox of Fiscal Austerity written by Justin Vélez-Hagan and published by Rowman & Littlefield. This book was released on 2019-12-12 with total page 223 pages. Available in PDF, EPUB and Kindle. Book excerpt: If governments followed the optimal fiscal policy path, surpluses in good times would counter necessary deficits during economic downturns, leading to worldwide balance. The world, however, has chosen to go in a different direction in recent decades, avoiding thrift in light of a decidedly more indebted future. When financial crises kicked off a global recession in 2008, the spotlight placed on countries’ fiscal conditions put pressure on policymakers around the globe to find a way to slow the growth of deficits and debt by imposing fiscal consolidations (or, more simply, austerity). How have these policies fared across the developed world? Were they even necessary to begin with? This book examines the many factors that have contributed to the success (or failure) of such policies, including timing, magnitude, accompanying policies, composition, and more, while explaining the economic rationale behind their choices.

Download or read book Global Waves of Debt written by M. Ayhan Kose and published by World Bank Publications. This book was released on 2021-03-03 with total page 403 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.