- Rainer Maurer
... 4. The Keynesian Model and its Policy Implications 4.1. The Keynesian Theory ➤ The Keynesian consumption function C(Y↑)↑ corresponds at first sight much better to empirical observations as the neoclassical consumption function C(i↑)↓. ...
... 4. The Keynesian Model and its Policy Implications 4.1. The Keynesian Theory ➤ The Keynesian consumption function C(Y↑)↑ corresponds at first sight much better to empirical observations as the neoclassical consumption function C(i↑)↓. ...
NBER WORKING PAPER SERIES LIQUIDITY TRAPS AND EXPECTATION DYNAMICS:
... Figure 1: Multiple steady states under normal policy. ...
... Figure 1: Multiple steady states under normal policy. ...
Economics and the 2008 crisis: a Keynesian view
... In the sections which follow, you will be introduced to some simple equations. Don’t panic! Wherever they are used, we teach you step by step how to read them. A general point to be aware of is that where one term is multiplied by another we will follow standard maths notation and leave out the mult ...
... In the sections which follow, you will be introduced to some simple equations. Don’t panic! Wherever they are used, we teach you step by step how to read them. A general point to be aware of is that where one term is multiplied by another we will follow standard maths notation and leave out the mult ...
II. IMF Macroeconomic Policy Advice in the Financial Crisis
... parallel, the IMF advocated the use of accommodative monetary policies including quantitative easing to counteract fiscal drag and sustain growth if needed. In the event, the IMF in 2010 endorsed the shift from fiscal stimulus to consolidation that was initiated in the United Kingdom in 2010, the Un ...
... parallel, the IMF advocated the use of accommodative monetary policies including quantitative easing to counteract fiscal drag and sustain growth if needed. In the event, the IMF in 2010 endorsed the shift from fiscal stimulus to consolidation that was initiated in the United Kingdom in 2010, the Un ...
Cross-Country Spillover Effects and Fiscal Policy
... from national economic policies are Pareto efficient. 5 Loosely speaking, this is the case if: i) national policy-makers act as price-takers, ii) they have enough policy instruments to control external transactions and iii) there are no imperfections in international markets. On the other hand, when ...
... from national economic policies are Pareto efficient. 5 Loosely speaking, this is the case if: i) national policy-makers act as price-takers, ii) they have enough policy instruments to control external transactions and iii) there are no imperfections in international markets. On the other hand, when ...
Macroeconomic Effects of Fiscal Policy
... mestic product, GDP, of 1.6 dollars. This assumption has been challenged as being overly optimistic. It has been stated that there is no theoretical or empirical justification for a fiscal multiplier of this magnitude in the USA, cf. e.g. Barro (2009) and Cogan et al. (2010). This debate has rekindl ...
... mestic product, GDP, of 1.6 dollars. This assumption has been challenged as being overly optimistic. It has been stated that there is no theoretical or empirical justification for a fiscal multiplier of this magnitude in the USA, cf. e.g. Barro (2009) and Cogan et al. (2010). This debate has rekindl ...
Cyclical fiscal policy in developing countries: the case of Africa
... reduces household’s private consumption. The transmission mechanism may work through the expectation that taxes will increase in the future and/or via the wealth effect associated with the upward adjustment of interest rates. In both cases, the likelihood that fiscal policy has non-Keynesian effects ...
... reduces household’s private consumption. The transmission mechanism may work through the expectation that taxes will increase in the future and/or via the wealth effect associated with the upward adjustment of interest rates. In both cases, the likelihood that fiscal policy has non-Keynesian effects ...
Macroeconomic Management When Policy Space is Constrained
... Recovery in GDP growth since the global financial crisis has been halting and weak. An aggressive and internationally–coordinated policy stimulus in 2009–10 turned around a severe recession. Since then, however, while monetary conditions have remained easy, many governments have withdrawn fiscal sti ...
... Recovery in GDP growth since the global financial crisis has been halting and weak. An aggressive and internationally–coordinated policy stimulus in 2009–10 turned around a severe recession. Since then, however, while monetary conditions have remained easy, many governments have withdrawn fiscal sti ...
Fiscal Policy: The Keynesian View and Historical Perspective
... do not believe that reductions in either resource prices or interest rates will promote recovery. • As a result, market economies are likely to experience recessions that are both severe and lengthy. Jump to first page ...
... do not believe that reductions in either resource prices or interest rates will promote recovery. • As a result, market economies are likely to experience recessions that are both severe and lengthy. Jump to first page ...
Demand Effects of Fiscal Policy since 2008
... New Keynesian models have neoclassical long-run properties. Before the crisis, there was thus a majority view, often called the New Consensus view, which regarded the market system as essentially self-stabilising. Any short-run demand management was assigned to monetary policy, managed by independen ...
... New Keynesian models have neoclassical long-run properties. Before the crisis, there was thus a majority view, often called the New Consensus view, which regarded the market system as essentially self-stabilising. Any short-run demand management was assigned to monetary policy, managed by independen ...
Fiscal Policy: The Keynesian View and Historical Development of
... believe that reductions in either resource prices or interest rates will promote recovery. • As a result, market economies are likely to experience recessions that are both severe and lengthy. Copyright ©2017 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted ...
... believe that reductions in either resource prices or interest rates will promote recovery. • As a result, market economies are likely to experience recessions that are both severe and lengthy. Copyright ©2017 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted ...
Helicopter Money - Global Interdependence Center
... fear fiscal dominance, they will not be able to avoid it. Fiscal dominance and central bank independence come in secular cycles and mirror secular private leveraging and deleveraging cycles, respectively. That is, as long as there will be secular debt cycles, central bank independence will be a stat ...
... fear fiscal dominance, they will not be able to avoid it. Fiscal dominance and central bank independence come in secular cycles and mirror secular private leveraging and deleveraging cycles, respectively. That is, as long as there will be secular debt cycles, central bank independence will be a stat ...
Keynesian Economics Bad
... history tells us that stimulus packages are ineffective in bringing about recovery , so it also tells us that "de-stimulus" — moving in the direction of monetary and fiscal contraction — likewise need not have severe adverse effects on employment, income, stock prices, and other macroeconomic variab ...
... history tells us that stimulus packages are ineffective in bringing about recovery , so it also tells us that "de-stimulus" — moving in the direction of monetary and fiscal contraction — likewise need not have severe adverse effects on employment, income, stock prices, and other macroeconomic variab ...
1 - Hans-Böckler
... instances were already subject to negative trends. This has triggered a second stage debate about the sustainability of public sector debt and the possibility of public sector financial crises. This second stage controversy was initiated by Reinhart and Rogoff (2009) in their book This Time is Diffe ...
... instances were already subject to negative trends. This has triggered a second stage debate about the sustainability of public sector debt and the possibility of public sector financial crises. This second stage controversy was initiated by Reinhart and Rogoff (2009) in their book This Time is Diffe ...
KEYNESIAN MULTIPLIER EFFECTS
... some portion of each dollar they receive. Keynes had a fancy name for this: Marginal Propensity to Consume (MPC). In layman’s terms this means people have a ...
... some portion of each dollar they receive. Keynes had a fancy name for this: Marginal Propensity to Consume (MPC). In layman’s terms this means people have a ...
keynesian multiplier effects
... INCREASED the GDP by $100B The Tax INCREASE has DECREASED the GDP by -80B. BOTTON LINE: GDP (AGGREGATE DEMAND) has INCREASED by $20B!! The Miracle of the Keynesian Multiplier… NOTE: This works in REVERSE as well. If Government Spending DECREASED by $20B and DECREASED Taxes by $20B, then the NET EFFE ...
... INCREASED the GDP by $100B The Tax INCREASE has DECREASED the GDP by -80B. BOTTON LINE: GDP (AGGREGATE DEMAND) has INCREASED by $20B!! The Miracle of the Keynesian Multiplier… NOTE: This works in REVERSE as well. If Government Spending DECREASED by $20B and DECREASED Taxes by $20B, then the NET EFFE ...
Fiscal Policy Reconsidered
... at least given hints that fiscal policy might be able to provide that help. This paper proposes a number of ways to speed up fiscal policy actions and, perhaps, to make them a bit less political. ...
... at least given hints that fiscal policy might be able to provide that help. This paper proposes a number of ways to speed up fiscal policy actions and, perhaps, to make them a bit less political. ...
conference paper
... and exchange rate counterparts? Three factors seem particularly relevant. First, coordination of fiscal policy faces free rider problems. States can not only benefit from others’ stimulative expenditures but also minimize the pain of their own fiscal consolidation by imposing austerity while others ...
... and exchange rate counterparts? Three factors seem particularly relevant. First, coordination of fiscal policy faces free rider problems. States can not only benefit from others’ stimulative expenditures but also minimize the pain of their own fiscal consolidation by imposing austerity while others ...
Fiscal Policy during the current Crisis
... Economic growth is one of the main aims of macroeconomists and the government, as it allows a movement towards a better standard of living for the population. A recession is negative growth of GDP causing a downswing in the economies' business cycle. This is a direct threat to the primary aims of a ...
... Economic growth is one of the main aims of macroeconomists and the government, as it allows a movement towards a better standard of living for the population. A recession is negative growth of GDP causing a downswing in the economies' business cycle. This is a direct threat to the primary aims of a ...
Learning and Change in Twentieth-Century British Economic Policy
... Mark Blaug (1990, 25) has noted that within a decade of the publication of Keynes’s General Theory in 1936, most economists had been “converted to the Keynesian way of thinking” and, for Blaug, this academic “revolution” has very close parallels with a Kuhnian “scientific revolution” (see also Mehta ...
... Mark Blaug (1990, 25) has noted that within a decade of the publication of Keynes’s General Theory in 1936, most economists had been “converted to the Keynesian way of thinking” and, for Blaug, this academic “revolution” has very close parallels with a Kuhnian “scientific revolution” (see also Mehta ...
NBER WORKING PAPER SERIES Joshua Aizenman
... decisions undertaken at time t-1, which reflects GDP at that time. Figure 2 reports the three fiscal expenditure time series, normalized by four-quarter lagged GDP. Each chart reports the actual time series, the predicted series of one-step-ahead forecasts using the proper ARIMA structure, and the 9 ...
... decisions undertaken at time t-1, which reflects GDP at that time. Figure 2 reports the three fiscal expenditure time series, normalized by four-quarter lagged GDP. Each chart reports the actual time series, the predicted series of one-step-ahead forecasts using the proper ARIMA structure, and the 9 ...
Fiscal Fallacies: The Failure of Activist Fiscal Policy
... 2008 has turned into a major, worldwide economic downturn more serious than any since the Great Depression of the 1930s. The financial and economic crisis has seen considerable debate about its origins and consequences, as well as the responses of policymakers. The crisis raises important issues abo ...
... 2008 has turned into a major, worldwide economic downturn more serious than any since the Great Depression of the 1930s. The financial and economic crisis has seen considerable debate about its origins and consequences, as well as the responses of policymakers. The crisis raises important issues abo ...
Essays in - The Economic and Business History Society
... that episodes of major expansions of government during emergencies were transitory—in particular the withdrawal, or lack thereof, of these government expansions once the emergency has passed. We find that fiscal policies have been slow to implement—on average 10.9 months lapsed between the start of ...
... that episodes of major expansions of government during emergencies were transitory—in particular the withdrawal, or lack thereof, of these government expansions once the emergency has passed. We find that fiscal policies have been slow to implement—on average 10.9 months lapsed between the start of ...
A review of global fiscal stimulus
... depend on the concrete set-up of these measures and whether they involve higher spending or lower taxes. As a note of caution, it has to be mentioned that the exceptional circumstance of a deep global economic slowdown in 2008-09 make the outcome of any concrete fiscal measure particularly uncertain ...
... depend on the concrete set-up of these measures and whether they involve higher spending or lower taxes. As a note of caution, it has to be mentioned that the exceptional circumstance of a deep global economic slowdown in 2008-09 make the outcome of any concrete fiscal measure particularly uncertain ...
2008–09 Keynesian resurgence
In 2008 and 2009, there was a worldwide resurgence of interest in Keynesian economics among prominent economists and policy makers. This included discussions and implementation of economic policies in accordance with the recommendations made by John Maynard Keynes in response to the Great Depression— most especially fiscal stimulus and expansionary monetary policy.From the end of the Great Depression until the early 1970s, Keynesian economics provided the main inspiration for economic policy makers in Western industrialized countries. The influence of Keynes's theories waned in the 1970s, due to stagflation and critiques from Milton Friedman, Robert Lucas, Jr., Friedrich Hayek and other economists who were less optimistic about the ability of interventionist government policy to positively regulate the economy. From the early 1980s to 2008, the normative consensus among economists was that attempts at fiscal stimulus would be ineffective even in a recession, and such policies were only occasionally employed by the governments of advanced nations.In 2008, a rapid shift of opinion took place among many prominent economists in favour of Keynesian stimulus, and, from October onward, policy makers began announcing major stimulus packages, in hopes of heading off the possibility of a global depression. By early 2009 there was widespread acceptance among the world's economic policy makers about the need for fiscal stimulus. Yet by late 2009 the consensus among economists began to break down, and in 2010 with a depression averted but unemployment in many countries still high, policy makers generally decided against further fiscal stimulus. With the end of the brief consensus for Keynesian policies, but with the neoliberal policies that characterised the Washington Consensus era still viewed by many as discredited, several commentators have predicted that the Macroeconomic domain will see a return to ideological struggles.