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Were 364 Economists All Wrong? - Institute of Economic Affairs
Were 364 Economists All Wrong? - Institute of Economic Affairs

... not just necessary to achieve their stated objectives of lower inflation, fiscal prudence and lower interest rates, they were arguably essential to prevent the economic chaos that arises from unmanageable levels of government borrowing and debt. It is easy to forget just how precarious Britain’s fin ...
Document
Document

... gap of –400, autonomous aggregate demand would have to change by –200, that is, autonomous aggregate demand would have to fall. If autonomous aggregate demand falls from 6200 to 6000, then short-run equilibrium output equals 12,000 and the output gap is ...
Chapter 7
Chapter 7

... Crowding Out in an Open Economy • open economy An economy with international trade. Y = C + I + G + NX Increased government spending need not crowd out either consumption or investment. It could lead to reduced exports and increased imports. ...
NBER WORKING PAPER SERIES CHINA CURRENT ACCOUNT IMBALANCES
NBER WORKING PAPER SERIES CHINA CURRENT ACCOUNT IMBALANCES

... imbalances. When that failed to produce results, the IMF shifted to a policy that it labeled a “multilateral surveillance process” in which countries were supposed to collectively monitor each other’s behavior. That also failed to produce any effects on the policies and current account imbalances o ...
Twin-Targeting Analytics of a Financial CGE Model ∗
Twin-Targeting Analytics of a Financial CGE Model ∗

... Program with the International Monetary Fund (IMF). The Program currently sets the macroeconomic policy agenda in Turkey and relies mainly on fiscal austerity with specific primary budget targets and a contractionary monetary policy implemented within an inflation targeting central bank regime. The ...
MNRW-TF: Assisting Resource Rich Countries Mobilise and
MNRW-TF: Assisting Resource Rich Countries Mobilise and

... dimensions, and its standard-setting work in fiscal transparency. The MNRW-TF also has provided an effective basis for the IMF to work with partners to help maximize the impact of their support for resource-rich countries. The MNRW-TF’s overarching objective is building economic policy and administr ...
Chapter 1 U G F
Chapter 1 U G F

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Solutions - University of California, Berkeley
Solutions - University of California, Berkeley

... upward of the MP curve. The IS curve does not move. In the short run the drop in productivity reduces output from Y! to Y! and increases the interest rate from r! to r! . Notice that even though the IA curve shifted up, we drew it so that IA! does not cross the AD curve at the new level of potential ...
146s10_l16a.pdf
146s10_l16a.pdf

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NBER WORKING PAPER SERIES A MODEL OF SECULAR STAGNATION Gauti B. Eggertsson
NBER WORKING PAPER SERIES A MODEL OF SECULAR STAGNATION Gauti B. Eggertsson

... Philippon and Midrigin (2011), Hall (2011), Mian and Sufi (2011) and Mian and Sufi (2012) for both theoretical and empirical analysis). In that work, typically, this shock leads to a temporary reduction in the real interest rate as debtors pay down their debt and savers need to compensate for the dr ...
Lecture Slides on Chapter 4 of Abel, et. al. (6th Canadian ed.)
Lecture Slides on Chapter 4 of Abel, et. al. (6th Canadian ed.)

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Supply-Side Economics: Guiding Principles for the Founding Fathers
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... and nonmarket activity. Consequently, reductions in tax rates—by inducing shifts from leisure to work, from consumption to saving, and from nonmarket activity to market activity—have important implications for changes in aggregate SEPTEMBER 1 9 8 2 , E C O N O M I C R E V I E W ...
why low inequality spurs growth: savings and investment by the poor
why low inequality spurs growth: savings and investment by the poor

... and a lower level of consumption initially, to allow the investment to take place.9 The household is trading off a loss in utility in the initial period for a larger gain in utility in the future. In this case, the marginal savings rate of a poor, credit-constrained household will be greater than on ...
What can monetary policy do?
What can monetary policy do?

... Cochrane argues that these properties of some models at the ZLB depend on expectation dynamics that are somewhat ad-hoc and not very plausible. Cochrane’s critique is that the paradoxes of the NK models around the ZLB (discontinuities with respect to the degree of price stickiness; very large and un ...
Aggregate Demand and Aggregate Supply
Aggregate Demand and Aggregate Supply

... prices, which will tend to increase spending on national exports and also decrease import spending in favor of national. products that compete with imports. (Similar to the substitution effect.), Xn increases, and vice versa. • Changes in aggregate demand: Determinants are the “other things” (beside ...
Global Fiscal Systems: From Crisis to Sustainability - WEF
Global Fiscal Systems: From Crisis to Sustainability - WEF

... choosing the instruments of consolidation so that they contribute to – or minimize trade-offs with – the goals of promoting near-term activity, long-term growth, income equality and global rebalancing. Simulations based on data from 31 countries point out that half of OECD countries can reduce exces ...
AN INCOME REDISTRIBUTION THEORY OF INFLATION AND
AN INCOME REDISTRIBUTION THEORY OF INFLATION AND

... unemployment, separately or together. We assume — and our theory is built on this assumption — that both inflation and unemployment redistribute income in an unegalitarian way. They do this by themselves along their course, and we shall show that they also accelerate themselves through this income r ...
This PDF is a selection from an out-of-print volume from... Bureau of Economic Research Volume Title: Conference on Business Cycles
This PDF is a selection from an out-of-print volume from... Bureau of Economic Research Volume Title: Conference on Business Cycles

... of changes is recurrent but not periodic; in duration business cycles vary from more than one year to ten or twelve years; they are not divisible into shorter cycles of similar character with amplitudes approximating their own. ...
Despite all this, the public sector could play an important role in
Despite all this, the public sector could play an important role in

... deficit policy), has a great role in the growth of money supply, its increase and enlarging monetary base as a results of continuous money Issuance (Khazraji 2003). Table (2) displays the analysis of money supply components (growth of monetary liquidity for the period 1990 – 2014. This can be track ...
M G F :
M G F :

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Review of the SFY 2015-16 Executive Budget Amendments and
Review of the SFY 2015-16 Executive Budget Amendments and

... oversight measures, checks and balances, and spending reviews that might otherwise apply could be bypassed. Furthermore, if the Legislature were to reduce any of these appropriations, all categories within the appropriation, including the original purpose for which the funding was provided, such as ...
Fiscal Stimulus and Potential Inflationary Risks
Fiscal Stimulus and Potential Inflationary Risks

This PDF is a selection from an out-of-print volume from... Bureau of Economic Research Volume Title: Studies in Income and Wealth
This PDF is a selection from an out-of-print volume from... Bureau of Economic Research Volume Title: Studies in Income and Wealth

... of measurement to a backward economy. If we ignore the complications arising from transactions with other countries, the distinction between income and outlay, for example, depends on the existence of two equal money flows—to nationals in return for their productive activity and from nationals to pu ...
Ch4
Ch4

... your work doesn’t count as part of GDP. If you get paid for the same work, it counts. ...
IOSR Journal of Economics and Finance (IOSR-JEF)
IOSR Journal of Economics and Finance (IOSR-JEF)

... foreign policy instrument by developed democracies to strengthen their relationship with, and consequently spread their influence on, the Third World. Aid according to Ajayi (2000:117) is ―a form of assistance by a government or financial institutions to other needy countries, which could be in cash ...
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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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