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EN EN 1. Introduction Due to general elections, which took place on
EN EN 1. Introduction Due to general elections, which took place on

... for 2014, slightly exceeding the forecast of the updated DBP. The Commission's forecast takes into account a budgetary impact of financial sector measures which is broadly the same as the updated DBP, and takes into account specific information provided by Austria's authorities. Both estimates facto ...
spd04 Bohn-k  225540 en
spd04 Bohn-k 225540 en

... The next sections will examine which of these paths are, or are not, sustainable. Table 1 documents the quantitative importance of economic growth for the dynamics of the U.S. debt. Column 1 shows average with-interest deficits in percent of GDP. Columns 2-4 displays corresponding values for the pri ...
Fourth Edition - Mac OS X Server
Fourth Edition - Mac OS X Server

... 1. If workers and firms expect that the price level will rise by 3 percent, from 100 to 103, they will adjust their wages and prices by that amount. 2. Holding constant all other variables that affect aggregate supply, the short-run aggregate supply curve will shift to the left. If workers and firms ...
Forecasting the economy - Office for Budget Responsibility
Forecasting the economy - Office for Budget Responsibility

... the Government’s fiscal mandate targets a cyclically-adjusted measure of the current budget balance – in other words, an estimate of what the balance would be if output in the economy was equal to the level consistent with stable inflation (i.e. the ‘output gap’ was zero). This again makes the forec ...
Optimal Time-Consistent Monetary, Fiscal and Debt Maturity Policy ∗ Eric M. Leeper
Optimal Time-Consistent Monetary, Fiscal and Debt Maturity Policy ∗ Eric M. Leeper

... a given deficit the policy maker will need to issue more bonds, but when debt is of longer maturity, the policy maker will also pay less to repay the existing debt stock. Therefore, with longer maturity debt the desire to reduce debt rapidly along the transition path is reduced and the debt stabili ...
D : M F I
D : M F I

... nature, may at times go beyond an accounting time frame of a year, but there could be an automatic correction. However, persisting imbalances are structural and more difficult to address. These may arise from the inability to raise revenues or contain expenditure or a combination of both. As was ind ...
What do the Different Measures of GDP Tell Us?
What do the Different Measures of GDP Tell Us?

... improve our analysis and understanding of the sources of economic growth. While each approach is useful, macroeconomic analysis is shifting from a short-term, recession-driven focus on managing aggregate demand to a long-term, supply-side perspective on the determinants of economic growth. This shif ...
Chapter 7: Putting All Markets Together: The AS
Chapter 7: Putting All Markets Together: The AS

... the effect of the price level on output. It is derived from the equilibrium conditions in the goods and financial markets.  Recall the equilibrium conditions for the goods and financial markets described in ...
Has Monetary Policy Become Less Powerful?
Has Monetary Policy Become Less Powerful?

public - Europa.eu
public - Europa.eu

... The careful analysis first uses the expenditure benchmark to assess fiscal effort. All in all, the aim of the careful analysis is to provide an adequate estimation of the extent of policy actions, to evaluate whether the Member State concerned has delivered on its policy commitments as set in the ED ...
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... starve-the-beast hypothesis than others. What are needed are tax changes that are not systematically correlated with other factors influencing government spending. An obvious implication is that spending-driven tax changes are not appropriate observations to use. Causation in these episodes runs fro ...
Monetary policy trade-offs and forward guidance
Monetary policy trade-offs and forward guidance

... households of the conditions under which the highly stimulative stance of monetary policy will be maintained. That should reduce the risk that, as the recovery gains traction, market interest rates rise prematurely and people worry excessively about early rises in borrowing costs. By so doing, it sh ...
Proposal 10: Creating an American Value
Proposal 10: Creating an American Value

... A low-rate VAT could generate substantial revenue. Based on estimates from Toder and Rosenberg (2010), we estimate that the United States could raise gross revenue of $355 billion in 2012 through a 5 percent VAT applied to all consumption except for spending on education, Medicaid and Medicare, char ...
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Tasmania`s Antarctic, sub-Antarctic and Southern Ocean sector

Chapter 8 - The Citadel
Chapter 8 - The Citadel

... Nominal and Real GDP  The Bureau of Economic Analysis now uses a chain-weighted measure of real GDP.  This means that changes in the prices and output levels of a certain good will contribute to overall changes in GDP to the extent that the good accounts for a significant share of ...
Optimal Government Debt Maturity under Limited Commitment
Optimal Government Debt Maturity under Limited Commitment

... example, if households are primarily buying long-term bonds ex-ante, then they appropriately anticipate that the government lacking commitment will pursue future policies which increase future short-term interest rates, thereby diluting their claims. In this case, households require a higher ex-ante ...
Textbook of Economics
Textbook of Economics

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Macroprudential Policy: Promise and Challenges * By Enrique G

... 2. Lack of credibility: Under commitment, macroprudential policymakers have incentives to be time-inconsistent and thus deviate from pre-announced policy rules. The argument is subtle, but at its core it has similar features as the well-known time-inconsistency arguments that undermine the credibili ...
effects of government spending on economic
effects of government spending on economic

The Evolution of US Monetary Policy: 2000-2007
The Evolution of US Monetary Policy: 2000-2007

... This paper attempts to draw distinctions between these alternative interpretations of how the Federal Reserve implemented its policy decisions during the period from 2000 through 2007. To this end, it estimates a vector autoregressive time series model with time-varying parameters and stochastic vo ...
to the CIC Final Report Executive Summary
to the CIC Final Report Executive Summary

... performed and this Deliverable (which is hereafter referred to as “Report”) was developed in accordance with our engagement letter dated November 12, 2009 and are subject to the terms and conditions included herein. Our services were performed in accordance with Standards for Consulting Services est ...
Chapter Ten - lhu.edu.tw
Chapter Ten - lhu.edu.tw

... If the IS curve’s shift to the right is due to an increase in the government purchase, the initial increase in the output in the short run will be eliminated due to the complete crowding-out effect. This will happen because the interest rate increases to crowd out the private investment.The original ...
A General Welfare Decomposition for CGE Models
A General Welfare Decomposition for CGE Models

... convention is adopted to ensure that the condition applies for imports. A final demand activity ‘total imports of each commodity’ is included, the inputs to which are imported commodities with negative values, equal in magnitude to the total CIF values of imported commodities used by all other activ ...
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... will also be so for an economy where the instruments necessary to engineer the nondistorted steady state are unavailable. For these reasons, we refrain from making the efficient-steadystate assumption and instead work with a model whose steady state is distorted. Departing from a model whose steady s ...
Fiscal Strategy 2015
Fiscal Strategy 2015

... the fiscal adjustment, improvement of the conditions on the financial market and more favourable labour market conditions. A significant improvement of the budget balance is expected, as well as a gradual increase in banks' credit activity and growth of domestic demand as the main driver of economic ...
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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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