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Interpreting clause 4(b) of the Policy Targets Agreement:
Interpreting clause 4(b) of the Policy Targets Agreement:

... that would be needed to clamp down on inflation pressures within this short time frame would in all likelihood open up a large negative output gap over successive months. This policy-induced recession would then require interest rates to be eased, and aggressively so, if the imminent fall in inflation ...
#24 AP Deficits(FINA#F2593D
#24 AP Deficits(FINA#F2593D

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PDF

... achieving these potential rates of food consumption were considered in other sections of the testimony given before the Agriculture Committee in connection with hearings on long-range agricultural policy. TWENTIETH CENTURY FUND STUDY. —The only set of data reviewed in this article which was not publ ...
Franz Seitz - OTH Amberg
Franz Seitz - OTH Amberg

... policy on the net worth or goodwill of business firms (balance sheet channel) or the reliance on bank loans and the lack of alternative financial resources, especially for small firms and households (bank lending channel). This tightens the credit constraint on some borrowers and limits their spendi ...
Can Great Depression Theories Explain the Great Recession?
Can Great Depression Theories Explain the Great Recession?

... Can Great Depression Theories explain the Great Recession? 2 Kirchgässner, 2009, p. 1), they will not be able to predict the upturn. So is economics useless? Surely not, if we understand economics as interpreting the past in order to let bad history not repeat. Consequently in an economic crisis ec ...
A Simulation of Counter-cyclical Intervention
A Simulation of Counter-cyclical Intervention

... empirical macroeconomics literature relevant to both fiscal and monetary policy. As such, this work should be viewed as a complement to, not a substitute for, Lengwiler’s simulation. A SIMPLE MODEL OF GOVERNMENT INTERVENTION It is impossible to understand the challenges and potential benefits associ ...
Decentralization and Sub-National Economics Thematic Group
Decentralization and Sub-National Economics Thematic Group

... government can be used to assess aspects of fiscal decentralization across countries, regions, and time. Fiscal decentralization encompasses expenditure and financing dimensions. To understand who does what, the amount of subnational government spending relative to the central government (e.g., rela ...
An Explanation of the Greek Crisis: “The Insiders – Outsiders Society”
An Explanation of the Greek Crisis: “The Insiders – Outsiders Society”

... combined effects of low total factor productivity growth and lower capital formation. The lower output feeds back to the public deficit via automatic stabilizers-type effects. The accumulation of public deficits in combination with the relatively low growth increases the public debt-to-GDP ratio to ...
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This PDF is a selection from a published volume from... Bureau of Economic Research

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The Working-Day Effect in the Austrian Economy
The Working-Day Effect in the Austrian Economy

... In order to answer the important question as to the economy's phase in the business cycle, it is necessary to isolate seasonal as well as calendar effects − to which working days belong − from the rest of the series. The simplest method of eliminating the effect of a variation in the number of worki ...
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Download

... public expenditures, but there are also cases where a specific subset of expenditures is addressed, for example primary expenditures in Belgium, Ireland and Italy, public consumption in Denmark, compensation of public employees in Greece. In Austria and Italy two and three targets, respectively, are ...
The euro area fiscal stance - ECB
The euro area fiscal stance - ECB

... while allowing budgetary room for manoeuvre. Adjustments required to meet the MTO are defined in structural terms (i.e. net of the impact of the cycle and one-off measures) and therefore generally allow the full operation of automatic stabilisers. These should be sufficient to deal with normal cycli ...
Optimal Automatic Stabilizers
Optimal Automatic Stabilizers

... aggregate slack is more responsive to the replacement rate for two reasons. First, there are more unemployed workers with high marginal propensities to consume receiving the transfers. Second, the effect of social insurance on precautionary savings motives is larger when there is a greater risk of u ...
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1 Greece`s 2013 Draft Budget: Key Targets and

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Deputy Minister of Finance speech
Deputy Minister of Finance speech

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An Aggregative Theory for a Closed Economy
An Aggregative Theory for a Closed Economy

... fall in response to open market purchases and tax increases. Open market operations induce larger changes in the price level than tax changes that transfer securities of equal value, but the effects on real balances are identical. Open market purchases raise the equilibrium price level; open market ...
NBER WORKING PAPER SERIES WINNERS AND LOSERS OF TAX COMPETITION
NBER WORKING PAPER SERIES WINNERS AND LOSERS OF TAX COMPETITION

... externalities of tax policy separately, studying them in simplified dynamic environments under partial equilibrium and with governments running balanced budgets in every period. Second, most of the literature is theoretical in nature and there have been few attempts to study the quantitative implica ...
A-level Economics Mark Scheme Unit 02 - The
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... Marks awarded to candidates should be in accordance with the following mark scheme and examiners should be prepared to use the full range of marks available. The mark scheme for most questions is flexible, permitting the candidate to score full marks in a variety of ways. Where the candidate’s respo ...
Reports - UM Personal World Wide Web Server
Reports - UM Personal World Wide Web Server

... estimates that absent gold sterilization, the 1937 monetary base would have been as much as 10 percent larger. However, the channel through which money supply declines affected real activity is unclear. There was relatively little impact on interest rates. Figure 1(b) shows the path of the yield on ...
Chapter 13 - the School of Economics and Finance
Chapter 13 - the School of Economics and Finance

... Monetary policy (MP): The actions the Federal Reserve takes to manage the money supply and interest rates to pursue macroeconomic policy objectives. Fiscal policy (FP): Changes in federal taxes and purchases that are intended to achieve macroeconomic policy objectives. Gov uses monetary and …scal po ...
Principles of Macroeconomics, Case/Fair/Oster, 10e
Principles of Macroeconomics, Case/Fair/Oster, 10e

... the tax rate could cause tax revenues to fall. Similarly, under the same circumstances, a cut in the tax rate could generate enough additional economic activity to cause revenues to rise. ...
AD and AS honors version
AD and AS honors version

...  When aggregate demand falls, output and the price level fall in the short run. Over time, a change in expectations causes wages, prices, and perceptions to adjust, and the short-run aggregate supply curve shifts rightward. In the long run, the economy returns to the natural rates of output and une ...
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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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