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current_account
current_account

... U.S. Gross National Expenditure and Its Components, 1990–2009 The figure shows consumption (C), investment (I), and government purchases (G), in billions of ...
Remittances and Institutions: Are Remittances a Curse?
Remittances and Institutions: Are Remittances a Curse?

... from its consumption. That is, whether provided by the government or by the household, the good is of the same quality. The intention is to capture the fact that many of the services that are provided by the public sector in recipient countries can also be acquired privately. For example, households ...
Macroeconomics and Politics in the Accumulation of Greece s Debt: An econometric investigation, 1975-2009
Macroeconomics and Politics in the Accumulation of Greece s Debt: An econometric investigation, 1975-2009

... PASOK won a landslide victory in October 1981, after Greece’s EEC entry, which it had been opposing. Ιn electoral 1981, which was also a year of world recession, the fiscal deficit rose from 2,6% of GDP in 1980 to 9% in 1981. Fiscal deficits remained high throughout the 1980s, and within a few years ...
Chapter 12 Keynesian Business Cycle Theory: The Sticky Price Model
Chapter 12 Keynesian Business Cycle Theory: The Sticky Price Model

... 39) Changes in the money supply in the Keynesian sticky wage model is not a likely explanation of the typical business cycle because the model counterfactually predicts that A) consumption is procyclical and the price level is procyclical. B) the price level is procyclical and the real wage is count ...
CAN INVESTMENT IN INTANGIBLES EXPLAIN THE SWEDISH
CAN INVESTMENT IN INTANGIBLES EXPLAIN THE SWEDISH

New Monetary Policy and Keynes
New Monetary Policy and Keynes

... steps in place the central bank should take; this may include publishing an explanation, or submitting a letter to the government explaining the reasons for missing the target and how to return to target. Given these attributes, two types of IT central banks can be identified: the explicit type, and ...
Gold Sterilization and the Recession of 1937-38
Gold Sterilization and the Recession of 1937-38

... sign to the change in gold holdings. In September 1937, at the request of the Federal Reserve, the Treasury desterilized $300 million. It resumed sterilization in October. By this time, the U.S. economy was clearly in a recession, and financial markets became suspicious that the Roosevelt administra ...
The Aggregate
The Aggregate

... on consumption, an interest-rate effect on investment, and an exchange-rate effect on net exports. ...
Assessment of the 2015 Convergence Programme for CROATIA
Assessment of the 2015 Convergence Programme for CROATIA

... statistical reclassification of (one-off) revenue from the transfer of pension fund assets from the second to the first pillar (0.8 pp., which under ESA95, counted as an incoming capital transfer, but under the current ESA 2010 is no longer affecting the deficit). Most of the remaining part reflects ...
Why Monetary Policy Matters
Why Monetary Policy Matters

... without requiring the reader to have any particular expertise in economics. First, what is monetary policy? Second, why have many central banks focused on controlling inflation rather than on other macroeconomic variables? Third, how do the actions of the central bank influence the level of economic ...
A Post–Keynesian Policy Model
A Post–Keynesian Policy Model

... regime as either profit–led or wage–led, and consequences therefrom for distributive policies. The discussion rests on two strands of literature. First, the Neo–Kaleckian literature on interactions between the rate of capacity utilization and the distribution of income, see Rowthorn (1982), Dutt (198 ...
Household Debt and Income Inequality, 1963$2003
Household Debt and Income Inequality, 1963$2003

... At the cross-sectional level, the arguments are di¤erent. Suppose that permanent income does not change, but the individual income patterns become more erratic over time, thus raising earnings dispersion at each point in time. Agents will try to close the gap between actual income (which determines ...
Infrastructure
Infrastructure

... All this is only about the benefit side of infrastructure – what about the cost? Cost-benefit comparison is needed to assess the extent of under-provision of infrastructure – and whether it is greater than that of other inputs (e.g., human capital) – Limited evidence on this (e.g., Canning and Pedro ...
Public Sector Stability and Balance of Payments Crises in Selected
Public Sector Stability and Balance of Payments Crises in Selected

... and an increase in them can also have some psychological effect. In addition, financing budget deficits by issuing bonds leads to higher consumption expenditure due to wealth effects and they raise interest rates. Ceteris paribus, these higher interest rates appreciate the currency and, because of t ...
Public Sector Stability and Balance of Payments Crisis
Public Sector Stability and Balance of Payments Crisis

... and an increase in them can also have some psychological effect. In addition, financing budget deficits by issuing bonds leads to higher consumption expenditure due to wealth effects and they raise interest rates. Ceteris paribus, these higher interest rates appreciate the currency and, because of t ...
Are Long-run Price Stability and Short-run Output
Are Long-run Price Stability and Short-run Output

Metroeconomica paper outline proposal (10-04-03)
Metroeconomica paper outline proposal (10-04-03)

... adjusting the nominal interest rate to changes in the inflation rate CBs can then bring current output in line with potential output (equation 2).3 There are two essential features of this adjustment process. First, monetary policy affects real variables as long as temporary nominal rigidities give ...
Inflation and Hyperinflation
Inflation and Hyperinflation

... (7) SE = πL(π). This means that in the long run seigniorage depends only on one variable: the rate of inflation. When inflation rises the rate of the inflation tax (π) increases, but the base (L(π)) on which the tax is levied decreases since the real monetary base is reduced as individual reduce th ...
Fiscal policy and private saving in Australia
Fiscal policy and private saving in Australia

... As mentioned above, it is likely that the Australian economy has been subject to a substantial amount of structural change over the past 50 years. From the 1950s through to the early 1980s, the economy was heavily regulated, with markets subject to price controls and tariff protection, a fixed excha ...
(Spillover) Effects of Labour Market Reforms in Germany and France
(Spillover) Effects of Labour Market Reforms in Germany and France

... blocks which are of crucial importance for the analysis we carry out. First, it allows for international macroeconomic spillovers through two channels: (i) international goods trade and (ii) international financial assets. To be more specific, each country specializes in the production of her own go ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Monetary Policy Rules
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Monetary Policy Rules

... The model is designed to be representative of recent work on the new neoclassical synthesis, in that New Keynesian-style price stickiness is introduced into an economy with otherwise neoclassical features including intertemporal optimization on the part of households and firms. However, five feature ...
CHAPTER V : MANAGEMENT OF FISCAL IMBALANCE : DEFICITS
CHAPTER V : MANAGEMENT OF FISCAL IMBALANCE : DEFICITS

... excluding specific elements of public expenditure or receipts. Three types of deficits namely, revenue deficit, fiscal deficit and primary deficit are indicated in the annual budget, while monetised deficit is worked out by the amount of increase in the RBI’s holdings of Government debt plus any dra ...
This PDF is a selection from a published volume from... National Bureau of Economic Research
This PDF is a selection from a published volume from... National Bureau of Economic Research

... Interestingly, the benevolent and cynical views are observationally equivalent. In both of them, the collapse of the bubble is accompanied by a decline in the interest rate and a large fiscal expansion that leads to a high but stable level of debt. In both views, this high level of debt is compatibl ...
PDF Download
PDF Download

... institutional settings, the impact of various shocks and the policy reactions. Some countries were less affected e.g. by the Great Recession than others for whom hysteresis could be a serious concern. Another theoretical literature that is also of some relevance for our analysis studies the effect ...
No Slide Title
No Slide Title

... A phase in the business cycle marked by a relatively high level of real GDP, full employment, and inflation ©1999 South-Western College Publishing ...
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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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