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.

Coordination of Monetary and Fiscal Policies
Coordination of Monetary and Fiscal Policies

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 1998-03-01

Total Pages: 33

ISBN-13: 1451844239

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Recently, monetary authorities have increasingly focused on implementing policies to ensure price stability and strengthen central bank independence. Simultaneously, in the fiscal area, market development has allowed public debt managers to focus more on cost minimization. This “divorce” of monetary and debt management functions in no way lessens the need for effective coordination of monetary and fiscal policy if overall economic performance is to be optimized and maintained in the long term. This paper analyzes these issues based on a review of the relevant literature and of country experiences from an institutional and operational perspective.

The Effectiveness of Fiscal Policy in Stimulating Economic Activity
The Effectiveness of Fiscal Policy in Stimulating Economic Activity

Author: Richard Hemming

Publisher: International Monetary Fund

Published: 2002-12

Total Pages: 62

ISBN-13:

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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.

Fiscal Policy and Long-Term Growth
Fiscal Policy and Long-Term Growth

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2015-04-20

Total Pages: 257

ISBN-13: 1498344658

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This paper explores how fiscal policy can affect medium- to long-term growth. It identifies the main channels through which fiscal policy can influence growth and distills practical lessons for policymakers. The particular mix of policy measures, however, will depend on country-specific conditions, capacities, and preferences. The paper draws on the Fund’s extensive technical assistance on fiscal reforms as well as several analytical studies, including a novel approach for country studies, a statistical analysis of growth accelerations following fiscal reforms, and simulations of an endogenous growth model.

Macroeconomic Policy
Macroeconomic Policy

Author: Farrokh K. Langdana

Publisher: Springer Science & Business Media

Published: 2002

Total Pages: 320

ISBN-13: 9781402071461

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Macroeconomic Policy is an applications oriented text designed for individuals who desire a hands-on approach to analyzing the effects of fiscal and monetary policies. The book demystifies the linkages between monetary and fiscal policies and key macroeconomic variables such as income, unemployment, inflation and interest rates. MBA and Executive MBA students who appreciate the importance of monetary and fiscal analysis will find this text to be right on target. Financial analysts and individual investors who need to strip away economic myths and jargon and systematically examine and understand the effects of macro policies will also find the book extremely useful. A unique feature of this book is the extensive use of specially written "newspaper" articles designed to simulate current macroeconomic news. Topics such as unemployment, soft landings, overheated economies, asset-price bubbles, liquidity traps, hyperinflations, and exchange rate meltdowns are incorporated in these articles. Each chapter contains exercises that enable the reader to relate specific underlined passages in these articles to the theory presented in preceding chapters. This distinctive approach ensures real-world applicability, and supporting diagrams further enable the reader to relate current economic news to the theoretical material discussed. Macroeconomic Policy is designed for a global audience. A key feature of this book is its emphasis on the role of expectations and "paradigm shifts" in implementing fiscal and monetary policies, both in developed as well as in emerging economies. This approach explains why once-successful macroeconomic models suddenly cease to be effective, and why Keynesian as well as Supply-Side models can legitimately coexist in several developed economies.

The Effects Of The Fiscal And Monetary Policy On The Exchange Rate
The Effects Of The Fiscal And Monetary Policy On The Exchange Rate

Author: Alexander Bremann

Publisher: GRIN Verlag

Published: 2018-06-25

Total Pages: 24

ISBN-13: 3668735395

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Seminar paper from the year 2016 in the subject Economics - Macro-economics, general, grade: 2,3, University of applied sciences, Munich, language: English, abstract: The value of a nation’s currency and its exchange rate is a key indicator for the performance of an economy’s import and export. This assignment evaluates the different impacts of macroeconomic policies on the exchange rate, the following research also draws attention to the fact that economists have had mixed findings of the effects of macroeconomic policies on the exchange rate. The use of secondary research and the AA-DD model will further enhance the various factors that are responsible to appreciate or depreciate a currency. The results of this assignment show that; fixed and floating exchange rates, as well as the MPC score, have significant impacts on the efficiency of macroeconomic policies altering the exchange rate. Macroeconomic policies trigger disposable income, prices and interest rates within an economy, which consequently affects the foreign exchange market leading to a change in the exchange rate. Especially in the field of a floating exchange rate economy, the impacts of fiscal but also monetary policies can be shown, fixed exchange rates disable economies to use monetary policies due to the fact that these will with high certainty have an impact on the exchange rate.

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.

Fiscal Policy, Stabilization, and Growth
Fiscal Policy, Stabilization, and Growth

Author: Guillermo E. Perry

Publisher: World Bank Publications

Published: 2007-10-19

Total Pages: 354

ISBN-13: 0821370855

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Fiscal policy in Latin America has been guided primarily by short-term liquidity targets whose observance was taken as the main exponent of fiscal prudence, with attention focused almost exclusively on the levels of public debt and the cash deficit. Very little attention was paid to the effects of fiscal policy on growth and on macroeconomic volatility over the cycle. Important issues such as the composition of public expenditures (and its effects on growth), the ability of fiscal policy to stabilize cyclical fluctuations, and the currency composition of public debt were largely neglected. As a result, fiscal policy has often amplified cyclical volatility and dampened growth. 'Fiscal Policy, Stabilization, and Growth' explores the conduct of fiscal policy in Latin America and its consequences for macroeconomic stability and long-term growth. In particular, the book highlights the procyclical and anti-investment biases embedded in the region's fiscal policies, explores their causes and macroeconomic consequences, and asesses their possible solutions.