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Rainbow background design
Rainbow background design

... 1. Impact of the 5th CPC was most pronounced during 1997-98 and 1998-99. 2. The increase in pay plus pensions began to taper off only after 2000-01. 3. In two years fiscal deficit rose from 4.70 to 6.29 as a percentage of GDP. 4. Revenue deficit were 2.30 and 3.71 per cent of GDP. 5. Not to argue th ...
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... The economy begins in equilibrium at point A, with real GDP of $14.0 trillion and a price level of 100. Without monetary policy, aggregate demand will shift from AD1 to AD2(without policy), which is not enough to keep the economy at full employment because longrun aggregate supply has shifted from L ...
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... “Taylor principle”, because of the zero lower bound on nominal rates, can lead inevitably to a deflationary spiral.1 They did not emphasize that the result depends on a decidedly peculiar-looking fiscal policy. Peculiar though it is, we see historical examples of something close to such a policy. To ...
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... asserted, however, that a very limited, circumscribed form of government intervention — namely, instructing central banks to keep the nation’s money supply, the sum of cash in circulation and bank deposits, growing on a steady path — is all that’s required to prevent depressions. Famously, Friedman ...
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Essays on Fiscal Policy in Developing Countries and Microstates Universitat Autònoma de Barcelona
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the nonneutrality of monetary policy with large price or wage setters

... unionized multisector economy in which monopoly unions in each sector set wages independently and simultaneously. This is set out in Section III. In both cases, the economic agents care only about real variables, so there is no money illusion.3 The key to our argument is that price or wage setters w ...
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... of macroeconomic shocks such as financial crises (Romer and Romer, 2015) or fiscal shocks (Jordà and Taylor, 2013). The role of macroeconomic conditions is explored using the smooth transition function proposed by Auerbach and Gorodnichenko (2012) to estimate fiscal multipliers in expansions and re ...
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... a commensurate increase in demand. So if nominal-aggregate demand is unchanged and prices are predetermined, as in the simpiest Keynesian story, then output and employment will also be left unchanged. Even with flexible output prices, if money wages are predetermined, there is no way simultaneously ...
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... above 4 percent annually, but with widely varying year-to-year rates, ranging from 8.5 percent in 2007 to -0.1 percent in 2012. This volatility reflects frequent external and domestic shocks, the latest one being a glacier movement at the Kumtor mine, responsible for above 10 percent of GDP, which c ...
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OCR A Level in Economics H460/03 Themes in economics

... The Environment Agency was heavily criticised for its handling of the floods and much debate was had around the lack of government intervention; in particular, the merits of dredging rivers. However, in order to receive funding from the government, the Environment Agency has to demonstrate that a fl ...
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Fiscal multiplier

In economics, the fiscal multiplier (not to be confused with monetary multiplier) is the ratio of a change in national income to the change in government spending that causes it. More generally, the exogenous spending multiplier is the ratio of a change in national income to any autonomous change in spending (private investment spending, consumer spending, government spending, or spending by foreigners on the country's exports) that causes it. When this multiplier exceeds one, the enhanced effect on national income is called the multiplier effect. The mechanism that can give rise to a multiplier effect is that an initial incremental amount of spending can lead to increased consumption spending, increasing income further and hence further increasing consumption, etc., resulting in an overall increase in national income greater than the initial incremental amount of spending. In other words, an initial change in aggregate demand may cause a change in aggregate output (and hence the aggregate income that it generates) that is a multiple of the initial change.The existence of a multiplier effect was initially proposed by Keynes student Richard Kahn in 1930 and published in 1931. Some other schools of economic thought reject or downplay the importance of multiplier effects, particularly in terms of the long run. The multiplier effect has been used as an argument for the efficacy of government spending or taxation relief to stimulate aggregate demand.In certain cases multiplier values less than one have been empirically measured (an example is sports stadiums), suggesting that certain types of government spending crowd out private investment or consumer spending that would have otherwise taken place. This crowding out can occur because the initial increase in spending may cause an increase in interest rates or in the price level. In 2009, The Economist magazine noted ""economists are in fact deeply divided about how well, or indeed whether, such stimulus works"", partly because of a lack of empirical data from non-military based stimulus. New evidence came from the American Recovery and Reinvestment Act of 2009, whose benefits were projected based on fiscal multipliers and which was in fact followed - from 2010 to 2012 - by a slowing of job loss and private sector job growth.
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