Monthly Bulletin articles, April 2004
... This article explores the main influences of fiscal policies on macroeconomic stability and price developments. It discusses a number of reasons why a fiscal policy orientation towards preserving stable economic conditions, both in the short and long term, is the most suitable one. The European fisc ...
... This article explores the main influences of fiscal policies on macroeconomic stability and price developments. It discusses a number of reasons why a fiscal policy orientation towards preserving stable economic conditions, both in the short and long term, is the most suitable one. The European fisc ...
The Implications of Macroprudential Policies for International Policy
... This paper explores the relevance of international coordination in the field of macroprudential policy.2 It thus draws together two sets of issues that have received increased attention since the onset of the global and euro area crises. Macroprudential policies, aimed at externalities that can thre ...
... This paper explores the relevance of international coordination in the field of macroprudential policy.2 It thus draws together two sets of issues that have received increased attention since the onset of the global and euro area crises. Macroprudential policies, aimed at externalities that can thre ...
Has the Inclusion of Forward-Looking Statements in Monetary Policy
... central bank more transparent or simply more predictable. Our study focuses on the period 30 October 2000 to 31 May 2007. As is well documented in most central banking handbooks, transparency is considered a key component of an effective monetary policy framework (see, for example, ECB 2004). Transp ...
... central bank more transparent or simply more predictable. Our study focuses on the period 30 October 2000 to 31 May 2007. As is well documented in most central banking handbooks, transparency is considered a key component of an effective monetary policy framework (see, for example, ECB 2004). Transp ...
In this chapter, look for the answers to these questions
... Fiscal Policy and Aggregate Supply § Most economists believe the short-run effects of fiscal policy mainly work through agg demand. § But fiscal policy might also affect agg supply. § Recall one of the Ten Principles from Chapter 1: People respond to incentives. § A cut in the tax rate gives wo ...
... Fiscal Policy and Aggregate Supply § Most economists believe the short-run effects of fiscal policy mainly work through agg demand. § But fiscal policy might also affect agg supply. § Recall one of the Ten Principles from Chapter 1: People respond to incentives. § A cut in the tax rate gives wo ...
Financial Crises and Systemic Bank Runs in a
... can be reinterpreted as a spread between liquid and illiquid assets. Banks offer deposits in order to provide money to households on demand. Two elements of banks’ balance sheets are crucial. On the liabilities side, deposits are nominal, that is, specified in terms of money. On the asset side, capi ...
... can be reinterpreted as a spread between liquid and illiquid assets. Banks offer deposits in order to provide money to households on demand. Two elements of banks’ balance sheets are crucial. On the liabilities side, deposits are nominal, that is, specified in terms of money. On the asset side, capi ...
and Uncertain Fiscal Financing - Federal Reserve Bank of Kansas City
... “Unfunded Liabilities” and Uncertain Fiscal Financing with a rational expectations equilibrium is the crux of the model’s uncertainty. “Unfunded liabilities” is a term that gets bandied about in discussions of the U.S. fiscal position. Public finance economists and government agencies distinguish b ...
... “Unfunded Liabilities” and Uncertain Fiscal Financing with a rational expectations equilibrium is the crux of the model’s uncertainty. “Unfunded liabilities” is a term that gets bandied about in discussions of the U.S. fiscal position. Public finance economists and government agencies distinguish b ...
Non-Keynesian Fiscal Policy effects
... Policy were developed by David Ricardo and John Maynard Keynes. On the one hand, David Ricardo's Theory, known as Ricardian Equivalence, debates Fiscal Policy will never affect the economy along with private consumption since Government expenditures are considered to be constant over time. So, any i ...
... Policy were developed by David Ricardo and John Maynard Keynes. On the one hand, David Ricardo's Theory, known as Ricardian Equivalence, debates Fiscal Policy will never affect the economy along with private consumption since Government expenditures are considered to be constant over time. So, any i ...
Mankiw 5/e Chapter 11: Aggregate Demand II
... The Fed knows better than to let M fall so much, especially during a contraction. Fiscal policymakers know better than to raise taxes or cut spending during a contraction. ...
... The Fed knows better than to let M fall so much, especially during a contraction. Fiscal policymakers know better than to raise taxes or cut spending during a contraction. ...
It`s Not a Minsky Moment, It`s a Minsky Era, Or: Inevitable Instability
... showing awareness of what Minsky was really about.3 The present paper discusses some of Minsky’s work and its development over the decades and argues that ‘Minsky Moment’ is a misnomer. We are in a Minsky Era. The concept of a sudden crash and panic in financial markets, as described by Walter Bageh ...
... showing awareness of what Minsky was really about.3 The present paper discusses some of Minsky’s work and its development over the decades and argues that ‘Minsky Moment’ is a misnomer. We are in a Minsky Era. The concept of a sudden crash and panic in financial markets, as described by Walter Bageh ...
Does Monetary Cooperation or Confrontation Lead to Successful
... begun in 2010, quantitative easing and other noninterest rate monetary policy measures are not an issue). That means we are not using the narrative method to identify monetary policy intentions the way we rely on the IMF dataset to do for fiscal policy. We believe this is justified for independent c ...
... begun in 2010, quantitative easing and other noninterest rate monetary policy measures are not an issue). That means we are not using the narrative method to identify monetary policy intentions the way we rely on the IMF dataset to do for fiscal policy. We believe this is justified for independent c ...
Money and the Transmission Mechanism in the Optimizing IS
... It is true that Hicks’ (1937) original derivation of his “IS-LL” curves was under the assumption of fully rigid nominal wages, while even some modern textbook treatments (e.g. Auerbach and Kotlikoff, 1995, p. 314) give the impression that the derivation of IS and LM relations requires the assumptio ...
... It is true that Hicks’ (1937) original derivation of his “IS-LL” curves was under the assumption of fully rigid nominal wages, while even some modern textbook treatments (e.g. Auerbach and Kotlikoff, 1995, p. 314) give the impression that the derivation of IS and LM relations requires the assumptio ...
money market
... Other Determinants of Planned Investment The assumption that planned investment depends only on the interest rate is obviously a simplification, just as is the assumption that consumption depends only on income. In practice, the decision of a firm on how much to invest depends on, among other things ...
... Other Determinants of Planned Investment The assumption that planned investment depends only on the interest rate is obviously a simplification, just as is the assumption that consumption depends only on income. In practice, the decision of a firm on how much to invest depends on, among other things ...
Fiscal Rigor or Rigor Mortis - European Union Center of California
... biases or distortions. Combined with the need to develop public support for institutional reforms, these considerations suggest that the best design will often be the delineation of a set of constraints on the allowable range of policy actions rather than a specific automatic rule.14 Thus, for examp ...
... biases or distortions. Combined with the need to develop public support for institutional reforms, these considerations suggest that the best design will often be the delineation of a set of constraints on the allowable range of policy actions rather than a specific automatic rule.14 Thus, for examp ...
Tilburg University Money, Fiscal Defecits and Government Debt in a
... between the monetary and fiscal authority on debt stabilization. The three equilibria are the Nash open-loop equilibrium, in which both players act simultaneously, the Stackelberg open-loop equilibrium with the monetary authority acting as Stackelberg leader and the Stackelberg equilibrium with the ...
... between the monetary and fiscal authority on debt stabilization. The three equilibria are the Nash open-loop equilibrium, in which both players act simultaneously, the Stackelberg open-loop equilibrium with the monetary authority acting as Stackelberg leader and the Stackelberg equilibrium with the ...
Principles of Macroeconomics Self-study quiz and Exercises with
... A) the interest rate and planned investment. B) the interest rate and money demand. C) income and planned investment. D) income and money demand. Answer: A 4) Which of the following is an example of an expansionary fiscal policy? A) the Fed selling government securities in the open market B) the fed ...
... A) the interest rate and planned investment. B) the interest rate and money demand. C) income and planned investment. D) income and money demand. Answer: A 4) Which of the following is an example of an expansionary fiscal policy? A) the Fed selling government securities in the open market B) the fed ...
NBER WORKING PAPER SERIES PERCEPTIONS AND MISPERCEPTIONS OF FISCAL INFLATION
... a misperception to believe that fiscal policy can affect inflation only if monetary policy monetizes deficits in the manner that Sargent and Wallace envision. The tight connection between seigniorage financing and inflation in Sargent and Wallace’s model stems from the assumption that bonds are real, or p ...
... a misperception to believe that fiscal policy can affect inflation only if monetary policy monetizes deficits in the manner that Sargent and Wallace envision. The tight connection between seigniorage financing and inflation in Sargent and Wallace’s model stems from the assumption that bonds are real, or p ...
Monetary Policy in Japan Since the Late 1980s
... to be the main policy instrument of the BOJ. Following the original Taylorrule specification, all the explanatory variables are in gap form, defined as follows. The inflation rate term is the gap between t, the actual inflation rate, and *t , the 10-year average inflation rate around the period t. ...
... to be the main policy instrument of the BOJ. Following the original Taylorrule specification, all the explanatory variables are in gap form, defined as follows. The inflation rate term is the gap between t, the actual inflation rate, and *t , the 10-year average inflation rate around the period t. ...
Money and Inflation
... I caused the German government’s expenditures to greatly exceed revenues. The government could have obtained revenues to cover these increased expenditures by raising taxes, but that solution was, as always, politically unpopular and would have taken much time to implement. The government could also ...
... I caused the German government’s expenditures to greatly exceed revenues. The government could have obtained revenues to cover these increased expenditures by raising taxes, but that solution was, as always, politically unpopular and would have taken much time to implement. The government could also ...
Chapter 10: Classical Business Cycle Analysis: Market
... Besides, fiscal policy increases output by making workers worse off, since they face higher taxes. Instead, government spending should be determined by cost-benefit analysis. Also, there may be lags in enacting the correct policy and in implementing it: So choosing the right policy today depends on ...
... Besides, fiscal policy increases output by making workers worse off, since they face higher taxes. Instead, government spending should be determined by cost-benefit analysis. Also, there may be lags in enacting the correct policy and in implementing it: So choosing the right policy today depends on ...
Should the European Central Bank and the
... Another worry in some circles is that fiscally irresponsible countries may ask the ECB or other community members for financial bailouts. Here again, it would appear that the SGP’s focus on deficits, rather than debt levels, is misplaced. Luxembourg – whose debt is only about 5% of GDP – could presu ...
... Another worry in some circles is that fiscally irresponsible countries may ask the ECB or other community members for financial bailouts. Here again, it would appear that the SGP’s focus on deficits, rather than debt levels, is misplaced. Luxembourg – whose debt is only about 5% of GDP – could presu ...