Introduction - Harvard Kennedy School
... Pact) or like the occasional U.S. proposals for a Balanced Budget Amendment (zero deficit). But those attempts have failed, in part because they are too rigid to allow the need for deficits in recessions, counterbalanced by surpluses in good times. It is not always the case that “tougher” constraint ...
... Pact) or like the occasional U.S. proposals for a Balanced Budget Amendment (zero deficit). But those attempts have failed, in part because they are too rigid to allow the need for deficits in recessions, counterbalanced by surpluses in good times. It is not always the case that “tougher” constraint ...
paper - University of Oxford, Department of Economics
... The second reason why a fiscal equivalent of a Taylor rule may be elusive also reflects national differences, but in this case differences in political structure. While it is natural for economists to focus on fiscal rules that approximate optimal policy, the reason we need explicit rules is often t ...
... The second reason why a fiscal equivalent of a Taylor rule may be elusive also reflects national differences, but in this case differences in political structure. While it is natural for economists to focus on fiscal rules that approximate optimal policy, the reason we need explicit rules is often t ...
Fiscal policy convergence and business cycle
... determined by the phase of the country’s business cycle. Additionally, we address the impact of debt dynamics by using interest payments as a measure of accumulated debt. Fiscal policy divergence is measured as four independent variables: the structural deficit divergence, cyclical deficit divergenc ...
... determined by the phase of the country’s business cycle. Additionally, we address the impact of debt dynamics by using interest payments as a measure of accumulated debt. Fiscal policy divergence is measured as four independent variables: the structural deficit divergence, cyclical deficit divergenc ...
Cyclicality in the Fiscal Policy of Nepal
... time) and withdraws demand during upturns (good time). Fiscal policy is indicated as procyclical if it is expanded (expansionary) when the economy goes up (good time). Fiscal policy is indicated as a-cyclical (neutral) if its stance does not change over business cycles. Governments have responded by ...
... time) and withdraws demand during upturns (good time). Fiscal policy is indicated as procyclical if it is expanded (expansionary) when the economy goes up (good time). Fiscal policy is indicated as a-cyclical (neutral) if its stance does not change over business cycles. Governments have responded by ...
Full Paper - Centre for Macroeconomics
... The second reason why a fiscal equivalent of a Taylor rule may be elusive also reflects national differences, but in this case differences in political structure. While it is natural for economists to focus on fiscal rules that approximate optimal policy, the reason we need explicit rules is often t ...
... The second reason why a fiscal equivalent of a Taylor rule may be elusive also reflects national differences, but in this case differences in political structure. While it is natural for economists to focus on fiscal rules that approximate optimal policy, the reason we need explicit rules is often t ...
- Department of Economics
... fiscal policy, the fiscal situation has worsened markedly since 2010. The aim of this paper is twofold: (1) to assess how the government re-established fiscal sustainability in the past, and (2) on the basis of literature and lessons learned from this past, and given current increasing debt levels, ...
... fiscal policy, the fiscal situation has worsened markedly since 2010. The aim of this paper is twofold: (1) to assess how the government re-established fiscal sustainability in the past, and (2) on the basis of literature and lessons learned from this past, and given current increasing debt levels, ...
No.334 / August 2010 IIIS Discussion Paper No. 334
... pre-crisis period (and, indeed, the quality of the economic research that is supposed to provide a basis for policymaking). The response to the crisis has involved aggressive orthodox and non-orthodox monetary policies, plus fiscal stimulus packages in many countries. With the passing of the most ac ...
... pre-crisis period (and, indeed, the quality of the economic research that is supposed to provide a basis for policymaking). The response to the crisis has involved aggressive orthodox and non-orthodox monetary policies, plus fiscal stimulus packages in many countries. With the passing of the most ac ...
Country Risk Of Croatia, Latvia - Association for Business and
... Croatia, a prospective EU member stateii. In addition, the respective country risk of these countries will be compared to the Euro zone’s risk for further analysis. By this combination, we intend to investigate the adverse consequences of the euro’s appreciation for the country risk of the Euro zone ...
... Croatia, a prospective EU member stateii. In addition, the respective country risk of these countries will be compared to the Euro zone’s risk for further analysis. By this combination, we intend to investigate the adverse consequences of the euro’s appreciation for the country risk of the Euro zone ...
Automatic Fiscal Stabilisers - European Commission
... The analysis of fiscal stabilisation is especially relevant in the EU, in view of the specifics of the EU macroeconomic policy framework. In the Economic and Monetary Union (EMU) monetary policy making is centralised and delegated to the European Central Bank (ECB). Hence, individual member states a ...
... The analysis of fiscal stabilisation is especially relevant in the EU, in view of the specifics of the EU macroeconomic policy framework. In the Economic and Monetary Union (EMU) monetary policy making is centralised and delegated to the European Central Bank (ECB). Hence, individual member states a ...
UNIWERSYTET GDAŃSKI – WYDZIAŁ EKONOMICZNY
... 1989 to the EU membership in 2004. I will also make a brief overview of the Polish economy in terms of main economic indicators. The last point of the second part of the chapter will depict a will of political elites towards the EMU membership. The third chapter is divided into two parts. In the fir ...
... 1989 to the EU membership in 2004. I will also make a brief overview of the Polish economy in terms of main economic indicators. The last point of the second part of the chapter will depict a will of political elites towards the EMU membership. The third chapter is divided into two parts. In the fir ...
Fiscal Policies and Rules in the Face of Revenue Volatility Within
... option is to adjust the fiscal stance, either by increasing non-SACU revenue, decreasing spending, or both. The debt pattern remains otherwise fixed.9 Optimal fiscal adjustment strategies are based on multiple instruments, as the composition of the adjustment is of utmost importance.10 Five strategi ...
... option is to adjust the fiscal stance, either by increasing non-SACU revenue, decreasing spending, or both. The debt pattern remains otherwise fixed.9 Optimal fiscal adjustment strategies are based on multiple instruments, as the composition of the adjustment is of utmost importance.10 Five strategi ...
Why has fiscal policy not succeeded in stimulating a lasting recovery
... by postal savings deposits investment is deemed not to add to demand, but merely reallocating funding among various projects. The important insight from this distinction is the necessity to distinguish between government spending that increases net purchasing power in the economy, and government spe ...
... by postal savings deposits investment is deemed not to add to demand, but merely reallocating funding among various projects. The important insight from this distinction is the necessity to distinguish between government spending that increases net purchasing power in the economy, and government spe ...
Fiscal reaction function and fiscal fatigue
... The global economic and financial crisis, as well as the euro area sovereign debt crisis, has brought heightened volatility and uncertainty in recent years. Questions about fiscal sustainability in advanced economies have featured prominently in the academic and policy debates. In particular, the is ...
... The global economic and financial crisis, as well as the euro area sovereign debt crisis, has brought heightened volatility and uncertainty in recent years. Questions about fiscal sustainability in advanced economies have featured prominently in the academic and policy debates. In particular, the is ...
Business Cycles and Public Finances
... Monetary Fund, IMF, and the European Central Bank, ECB. The calculation is a part of these institutions' assessment of public finances and the fiscal policy pursued. In an EU context, the structural balance plays a key role in the assessment of the member states' compliance with the requirements set ...
... Monetary Fund, IMF, and the European Central Bank, ECB. The calculation is a part of these institutions' assessment of public finances and the fiscal policy pursued. In an EU context, the structural balance plays a key role in the assessment of the member states' compliance with the requirements set ...
Business Cycle (De)Synchronization in the Aftermath of the Global
... trade substantially and concludes that a country is more likely to satisfy the criteria for entry into a currency union ex-post than ex-ante. This implies a share of currency trade three times as much as with different currencies. Consequently, currency unions (e.g., EMU) may lead to a large increas ...
... trade substantially and concludes that a country is more likely to satisfy the criteria for entry into a currency union ex-post than ex-ante. This implies a share of currency trade three times as much as with different currencies. Consequently, currency unions (e.g., EMU) may lead to a large increas ...
Is the Twin Deficits Hypothesis Relevant to Fiji?
... exchange, are a transfer of real resources to the receiving countries. As such, they not only kept domestic inflation low but also served as a cushion against pressures of current account deficits in the balance of payments on exchange rates (Jayaraman, 2006). Following the end of the Cold War in th ...
... exchange, are a transfer of real resources to the receiving countries. As such, they not only kept domestic inflation low but also served as a cushion against pressures of current account deficits in the balance of payments on exchange rates (Jayaraman, 2006). Following the end of the Cold War in th ...
Germany´s Federal Debt Brake
... and Growth Pact. In addition, together with 24 other EU member states, Germany signed the “Treaty on Stability, Coordination and Governance in the Economic and Monetary Union” (fiscal compact) in 2012. Consistent implementation of these obligations at national level is a crucial condition for the st ...
... and Growth Pact. In addition, together with 24 other EU member states, Germany signed the “Treaty on Stability, Coordination and Governance in the Economic and Monetary Union” (fiscal compact) in 2012. Consistent implementation of these obligations at national level is a crucial condition for the st ...
Cyclicality in the Fiscal Policy of Nepal
... and stability. It is an ingredient for poverty reduction too (IMF, 2006). Fiscal adjustment is the key to achieve sound and sustainable fiscal position. It may involve either tightening or loosening the fiscal stance, depending on individual country circumstances. Loose fiscal policy can lead to inf ...
... and stability. It is an ingredient for poverty reduction too (IMF, 2006). Fiscal adjustment is the key to achieve sound and sustainable fiscal position. It may involve either tightening or loosening the fiscal stance, depending on individual country circumstances. Loose fiscal policy can lead to inf ...
Effects Of Budget Deficit On Economic Growth In Kenya
... The basic nature of any economy depends on the availability of its productive resources in proportion to its requirements. These requirements are ever growing while the availability of resources to meet them is always insufficient. Each and every government undertake numerous activities and pursue c ...
... The basic nature of any economy depends on the availability of its productive resources in proportion to its requirements. These requirements are ever growing while the availability of resources to meet them is always insufficient. Each and every government undertake numerous activities and pursue c ...
Estimating simple fiscal policy reaction functions for the euro area
... area and individual euro area countries. Our reaction function allows for primary surpluses to feature three components: an anti-cyclical response of primary surpluses to the output gap, a response to the debt-GDP ratio, and an exogenous fiscal policy shifter. In line with the cyclical adjustment li ...
... area and individual euro area countries. Our reaction function allows for primary surpluses to feature three components: an anti-cyclical response of primary surpluses to the output gap, a response to the debt-GDP ratio, and an exogenous fiscal policy shifter. In line with the cyclical adjustment li ...
Is austerity an effective recovery measure for the Eurozone?
... the periphery countries such as Italy and Greece. But, worries about the financial stability in the Eurozone were not just restricted to the peripheral countries. An ageing population in the entire Eurozone with higher social expenditure as a consequence, combined with the financial crisis, worsened ...
... the periphery countries such as Italy and Greece. But, worries about the financial stability in the Eurozone were not just restricted to the peripheral countries. An ageing population in the entire Eurozone with higher social expenditure as a consequence, combined with the financial crisis, worsened ...
The interaction between fiscal and monetary policy in Hungary over
... is active (expansionary) while monetary policy is passive (loose). Fiscal policy therefore allows excessively high deficits which cannot be sustained over the long run. In order to maintain the long-term budget balance of the consolidated general government, Leeper’s model calls for the central bank ...
... is active (expansionary) while monetary policy is passive (loose). Fiscal policy therefore allows excessively high deficits which cannot be sustained over the long run. In order to maintain the long-term budget balance of the consolidated general government, Leeper’s model calls for the central bank ...
Chapter 1 U G F
... These fiscal developments in Union Finances took place during the year were mainly on account of (a) an increase in total expenditure by Rs. 59916 crore accompanied with a decline in non-debt receipts by Rs. 1213 crore, (b) a reduction of Rs. 52439 crore in loan recovery receipts of Union over the p ...
... These fiscal developments in Union Finances took place during the year were mainly on account of (a) an increase in total expenditure by Rs. 59916 crore accompanied with a decline in non-debt receipts by Rs. 1213 crore, (b) a reduction of Rs. 52439 crore in loan recovery receipts of Union over the p ...
Macroeconomic Stability: The More the Better?
... Source: IMF, International Finance Statistics. Balanced sample includes 53 countries. Note: Data for the first half of the 1970s are too limited to allow a comprehensive analysis. Sudden stops are defined as declines in net capital inflows in excess of a given percentage of GDP. Reversals are allowe ...
... Source: IMF, International Finance Statistics. Balanced sample includes 53 countries. Note: Data for the first half of the 1970s are too limited to allow a comprehensive analysis. Sudden stops are defined as declines in net capital inflows in excess of a given percentage of GDP. Reversals are allowe ...
Stability and Growth Pact
The Stability and Growth Pact (SGP) is an agreement, among the 28 Member states of the European Union, to facilitate and maintain the stability of the Economic and Monetary Union (EMU). Based primarily on Articles 121 and 126 of the Treaty on the Functioning of the European Union, it consists of fiscal monitoring of members by the European Commission and the Council of Ministers, and the issuing of a yearly recommendation for policy actions to ensure a full compliance with the SGP also in the medium-term. If a Member State breaches the SGP's outlined maximum limit for government deficit and debt, the surveillance and request for corrective action will intensify through the declaration of an Excessive Deficit Procedure (EDP); and if these corrective actions continue to remain absent after multiple warnings, the Member State can ultimately be issued economic sanctions. The pact was outlined by a resolution and two council regulations in July 1997. The first regulation ""on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies"", known as the ""preventive arm"", entered into force 1 July 1998. The second regulation ""on speeding up and clarifying the implementation of the excessive deficit procedure"", known as the ""dissuasive arm"", entered into force 1 January 1999.The purpose of the pact was to ensure that fiscal discipline would be maintained and enforced in the EMU. All EU member states are automatically members of both the EMU and the SGP, as this is defined by paragraphs in the EU Treaty itself. The fiscal discipline is ensured by the SGP by requiring each Member State, to implement a fiscal policy aiming for the country to stay within the limits on government deficit (3% of GDP) and debt (60% of GDP); and in case of having a debt level above 60% it should each year decline with a satisfactory pace towards a level below. As outlined by the ""preventive arm"" regulation, all EU member states are each year obliged to submit a SGP compliance report for the scrutiny and evaluation of the European Commission and the Council of Ministers, that will present the country's expected fiscal development for the current and subsequent three years. These reports are called ""stability programmes"" for eurozone Member States and ""convergence programmes"" for non-eurozone Member States, but despite having different titles they are identical in regards of the content. After the reform of the SGP in 2005, these programmes have also included the Medium-Term budgetary Objectives (MTO's), being individually calculated for each Member State as the medium-term sustainable average-limit for the country's structural deficit, and the Member State is also obliged to outline the measures it intends to implement to attain its MTO. If the EU Member State does not comply with both the deficit limit and the debt limit, a so-called ""Excessive Deficit Procedure"" (EDP) is initiated along with a deadline to comply, which basically includes and outlines an ""adjustment path towards reaching the MTO"". This procedure is outlined by the ""dissuasive arm"" regulation.The SGP was initially proposed by German finance minister Theo Waigel in the mid-1990s. Germany had long maintained a low-inflation policy, which had been an important part of the German economy's strong performance since the 1950s. The German government hoped to ensure the continuation of that policy through the SGP, which would ensure the prevalence of fiscal responsibility, and limit the ability of governments to exert inflationary pressures on the European economy. As such, it was also described to be a key tool for the Member States adopting the euro, to ensure that they did not only meet the Maastricht convergence criteria at the time of adopting the euro, but kept on to comply with the fiscal criteria for the following years.