Fiscal Policy after the Financial Crisis

Fiscal Policy after the Financial Crisis

Author: Alberto Alesina

Publisher: University of Chicago Press

Published: 2013-06-25

Total Pages: 596

ISBN-13: 022601844X

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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.


Can Government Demand Stimulate Private Investment? Evidence from U.S. Federal Procurement

Can Government Demand Stimulate Private Investment? Evidence from U.S. Federal Procurement

Author: Shafik Hebous

Publisher: International Monetary Fund

Published: 2016-03-10

Total Pages: 33

ISBN-13: 1513578723

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We study the effects of federal purchases on firms’ investment using a novel panel dataset that combines federal procurement contracts in the United States with key financial firm-level information. We find that 1 dollar of federal spending increases firms’ capital investment by 7 to 11 cents. The average effect masks heterogeneity: Effects are stronger for firms that face financing constraints and they are close to 0 for unconstrained firms. In line with the financial accelerator model, our findings indicate that the effect of government purchases works through easing firms’ access to external borrowing. Furthermore, industry-level analysis suggests that that the increase in investment at the firm level translates into an industry-wide effect without crowding-out capital investment of other firms in the same industry.


Local Food Systems; Concepts, Impacts, and Issues

Local Food Systems; Concepts, Impacts, and Issues

Author: Steve Martinez

Publisher: DIANE Publishing

Published: 2010-11

Total Pages: 87

ISBN-13: 1437933629

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This comprehensive overview of local food systems explores alternative definitions of local food, estimates market size and reach, describes the characteristics of local consumers and producers, and examines early indications of the economic and health impacts of local food systems. Defining ¿local¿ based on marketing arrangements, such as farmers selling directly to consumers at regional farmers¿ markets or to schools, is well recognized. Statistics suggest that local food markets account for a small, but growing, share of U.S. agricultural production. For smaller farms, direct marketing to consumers accounts for a higher percentage of their sales than for larger farms. Charts and tables.


The Euro-Area Government Spending Multiplier at the Effective Lower Bound

The Euro-Area Government Spending Multiplier at the Effective Lower Bound

Author: Adalgiso Amendola

Publisher: International Monetary Fund

Published: 2019-06-28

Total Pages: 58

ISBN-13: 1498322913

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We build a factor-augmented interacted panel vector-autoregressive model of the Euro Area (EA) and estimate it with Bayesian methods to compute government spending multipliers. The multipliers are contingent on the overall monetary policy stance, captured by a shadow monetary policy rate. In the short run (one year), whether the fiscal shock occurs when the economy is at the effective lower bound (ELB) or in normal times does not seem to matter for the size of the multiplier. However, as the time horizon increases, multipliers diverge across the two regimes. In the medium run (three years), the average multiplier is about 1 in normal times and between 1.6 and 2.8 at the ELB, depending on the specification. The difference between the two multipliers is distributed largely away from zero. More generally, the multiplier is inversely correlated with the level of the shadow monetary policy rate. In addition, we verify that EA data lend support to the view that the multiplier is larger in periods of economic slack, and we show that the shadow rate and the state of the business cycle are autonomously correlated with its size. The econometric approach deals with several technical problems highlighted in the empirical macroeconomic literature, including the issues of fiscal foresight and limited information.


Economic Analysis and Infrastructure Investment

Economic Analysis and Infrastructure Investment

Author: Edward L. Glaeser

Publisher: University of Chicago Press

Published: 2021-11-11

Total Pages: 479

ISBN-13: 022680058X

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"Policy-makers often call for expanding public spending on infrastructure, which includes a broad range of investments from roads and bridges to digital networks that will expand access to high-speed broadband. Some point to near-term macro-economic benefits and job creation, others focus on long-term effects on productivity and economic growth. This volume explores the links between infrastructure spending and economic outcomes, as well as key economic issues in the funding and management of infrastructure projects. It draws together research studies that describe the short-run stimulus effects of infrastructure spending, develop new estimates of the stock of U.S. infrastructure capital, and explore the incentive aspects of public-private partnerships (PPPs). A salient issue is the treatment of risk in evaluating publicly-funded infrastructure projects and in connection with PPPs. The goal of the volume is to provide a reference for researchers seeking to expand research on infrastructure issues, and for policy-makers tasked with determining the appropriate level of infrastructure spending"--


Fiscal Multipliers

Fiscal Multipliers

Author: Nicoletta Batini

Publisher: International Monetary Fund

Published: 2014-10-02

Total Pages: 33

ISBN-13: 1498322433

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Fiscal multipliers are important tools for macroeconomic projections and policy design. In many countries, little is known about the size of multipliers, as data availability limits the scope for empirical research. This note provides general guidance on the definition, measurement, and use of fiscal multipliers. It reviews the literature related to their size, persistence and determinants. For countries where no reliable estimate is available, the note proposes a simple method to come up with reasonable values. Finally, the note presents options to incorporate multipliers in macroeconomic forecasts.


Local Government Development in Post-war Japan

Local Government Development in Post-war Japan

Author: Michio Muramatsu

Publisher: Oxford University Press, USA

Published: 2001

Total Pages: 280

ISBN-13: 9780199248285

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This book examines the evolution of intergovernmental relations in postwar Japan. These relations are shown to be both complex and dynamic, and the Japanese model is revealed as one in which aspects of both central control and local autonomy have co-existed with the balance shifting gradually over time towards the latter. The Japanese system has helped to maintain broad-based economic growth since it has at its core a strongly egalitarian fiscal transfer mechanism. At the same time, it has proved to be consistent, to a much greater extent than previously recognized, with political development, or progress in the attainment of such political values as liberty (personal rights) and equality (broad participation in public affairs) for individuals and communities. This is because the national government has proved flexible enough to accommodate, although not always with grace or alacrity, citizen concerns about the quality of life. The Japanese approach to intergovernmental relationships has also been successful in solving coordination problems which often arise between local and central government units and in building capacity to support greater and effective decentralization. Coordination problems have been handled through a variety of mechanisms including the practice of agency delegated functions, while local capacity issues have been addressed through such practices as the exchange of personnel across different levels of government and the use of attractive compensation and training packages to recruit and retain local staff. The Japanese experience thus provides an example of gradual and guided decentralization based on shared responsibilities between local and central governments for mobilizing, managing, and spending public resources in the pursuit of sustainable development.


How Big (Small?) are Fiscal Multipliers?

How Big (Small?) are Fiscal Multipliers?

Author: Ethan Ilzetzki

Publisher: International Monetary Fund

Published: 2011-03-01

Total Pages: 68

ISBN-13: 1455218022

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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.


The New Americans

The New Americans

Author: Panel on the Demographic and Economic Impacts of Immigration

Publisher: National Academies Press

Published: 1997-10-28

Total Pages: 449

ISBN-13: 0309521424

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This book sheds light on one of the most controversial issues of the decade. It identifies the economic gains and losses from immigration--for the nation, states, and local areas--and provides a foundation for public discussion and policymaking. Three key questions are explored: What is the influence of immigration on the overall economy, especially national and regional labor markets? What are the overall effects of immigration on federal, state, and local government budgets? What effects will immigration have on the future size and makeup of the nation's population over the next 50 years? The New Americans examines what immigrants gain by coming to the United States and what they contribute to the country, the skills of immigrants and those of native-born Americans, the experiences of immigrant women and other groups, and much more. It offers examples of how to measure the impact of immigration on government revenues and expenditures--estimating one year's fiscal impact in California, New Jersey, and the United States and projecting the long-run fiscal effects on government revenues and expenditures. Also included is background information on immigration policies and practices and data on where immigrants come from, what they do in America, and how they will change the nation's social fabric in the decades to come.