Share

Fiscal Rules and the Procyclicality of Fiscal Policy in the Developing World

2014-07-10 Business & Economics
Download Fiscal Rules and the Procyclicality of Fiscal Policy in the Developing World PDF Online Free

Author :
Release : 2014-07-10
Genre : Business & Economics
Kind : eBook
Book Rating : 520/5 ( reviews)

GET EBOOK


Book Synopsis Fiscal Rules and the Procyclicality of Fiscal Policy in the Developing World by : Ms.Elva Bova

Download or read book Fiscal Rules and the Procyclicality of Fiscal Policy in the Developing World written by Ms.Elva Bova. This book was released on 2014-07-10. Available in PDF, EPUB and Kindle. Book excerpt: This paper documents the spread of fiscal rules in the developing world and investigates the relation between fiscal rules and procyclical fiscal policy. We find that, since the early 2000s, developing countries outnumbered advanced economies as users of fiscal rules. Rules were adopted either as part of the toolkit to join currency unions or to strengthen fiscal frameworks during and after large stabilization and policy reform episodes. The paper also finds that the greater use of fiscal rules has not shielded these countries from procyclicality, since fiscal policy remains procyclical following the adoption of a fiscal rule. We find partial evidence that some features of “second generation” rules, such as the use of cyclically-adjusted targets, well-defined escape clauses, together with stronger legal and enforcement arrangements, may be associated with less procyclicality.

Procyclical Fiscal Policy: Shocks, Rules, and Institutions - A View From MARS

2006-01-01
Download Procyclical Fiscal Policy: Shocks, Rules, and Institutions - A View From MARS PDF Online Free

Author :
Release : 2006-01-01
Genre :
Kind : eBook
Book Rating : 874/5 ( reviews)

GET EBOOK


Book Synopsis Procyclical Fiscal Policy: Shocks, Rules, and Institutions - A View From MARS by : Paolo Manasse

Download or read book Procyclical Fiscal Policy: Shocks, Rules, and Institutions - A View From MARS written by Paolo Manasse. This book was released on 2006-01-01. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses the roles of shocks, rules, and institutions as possible sources of procyclicality in fiscal policy. By employing parametric and nonparametric techniques, I reach the following four main conclusions. First, policymakers' reactions to the business cycle is different depending on the state of the economy-fiscal policy is "acyclical" during economic bad times, while it is largely procyclical during good times. Second, fiscal rules and fiscal responsibility laws tend to reduce the deficit bias on average, and seem to enhance, rather than to weaken, countercyclical policy. However, the evidence also suggests that fiscal frameworks do not exert independent effects when the quality of institutions is accounted for. Third, strong institutions are associated to a lower deficit bias, but their effect on procyclicality is different in good and bad times, and it is subject to decreasing returns. Fourth, unlike developed countries, fiscal policy in developing countries is procyclical even during (moderate) recessions; in "good times," however, fiscal policy is actually more procyclical in developed economies.

Fiscal Policy in Developing Countries:

2007 Economic development
Download Fiscal Policy in Developing Countries: PDF Online Free

Author :
Release : 2007
Genre : Economic development
Kind : eBook
Book Rating : 492/5 ( reviews)

GET EBOOK


Book Synopsis Fiscal Policy in Developing Countries: by : Roberto Perotti

Download or read book Fiscal Policy in Developing Countries: written by Roberto Perotti. This book was released on 2007. Available in PDF, EPUB and Kindle. Book excerpt: This paper surveys fiscal policy in developing countries from the point of view of long-run growth. The first section reviews existing methodologies to estimate the effects of fiscal policy shocks and of systematic fiscal policy, with time series or with cross-sectional methods, and their applicability to developing countries. The second section surveys optimal fiscal policy in developing countries, by considering the role of the intertemporal government budget, and sustainability and solvency. It also reviews the fuzzy debate on "fiscal space" and "macroeconomic space" - and the usefulness (or lack thereof) of these terms for policy analysis. The third section asks what theory tells us about the optimal cyclical behavior of fiscal policy in developing countries. It shows that it very much depends on the assumptions about the interactions between credit market imperfections at the individual, firms, or government level, and on the supply of external funds to the country. Different sets of assumptions lead to different implications about optimal cyclical behavior. The available evidence on the cyclical behavior of fiscal policy, and possible reasons for the observed prevalence of a procyclical behavior in developing countries, is also reviewed. If one agrees that fiscal policy is indeed less countercyclical than we think is optimal, the issue is how to correct the problem. One obvious question is why government do not self-insure, i.e. why they do not accumulate assets in upturns and decumulate them in downturns. This leads to the analysis of fiscal rules and stabilization funds, in the fourth section. The last section concludes with what the author considers important research and policy questions in each part.

Procyclical Fiscal Policy

2018-12-28 Business & Economics
Download Procyclical Fiscal Policy PDF Online Free

Author :
Release : 2018-12-28
Genre : Business & Economics
Kind : eBook
Book Rating : 958/5 ( reviews)

GET EBOOK


Book Synopsis Procyclical Fiscal Policy by : Toshihiro Ihori

Download or read book Procyclical Fiscal Policy written by Toshihiro Ihori. This book was released on 2018-12-28. Available in PDF, EPUB and Kindle. Book excerpt: Conventional wisdom dictates that a fiscal policy should be counter-cyclical. However, contrary to this conventional views, recent research has demonstrated that fiscal policy is actually procyclical in most developing countries. In this book, we attempt to propose a new interpretation of this procyclicality after reviewing theoretical and empirical evolution of the research. In particular, by incorporating the political effort behavior of private agents into a weak government model, we explore how income fluctuations affect the optimal budget deficits in a political economy. If the government can control the political behavior, normally, the optimal budget deficit should rise in a recession as a first-best case; however, interestingly, a recession does not necessarily prompt an increase in the budget deficits in a second-best political economy. The response of the budget deficits to income fluctuations mainly depends on the efficiency of political effort, which may correspond to the degree of democracy and bureaucratic efficiency of the governments. We test the prediction of the pro-cyclical fiscal policy and find it applicable for democratic countries with semi-efficient governments including Japan.

Flexible Fiscal Rules and Countercyclical Fiscal Policy

2016-01-22 Business & Economics
Download Flexible Fiscal Rules and Countercyclical Fiscal Policy PDF Online Free

Author :
Release : 2016-01-22
Genre : Business & Economics
Kind : eBook
Book Rating : 465/5 ( reviews)

GET EBOOK


Book Synopsis Flexible Fiscal Rules and Countercyclical Fiscal Policy by : Ms.Martine Guerguil

Download or read book Flexible Fiscal Rules and Countercyclical Fiscal Policy written by Ms.Martine Guerguil. This book was released on 2016-01-22. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses the impact of different types of flexible fiscal rules on the procyclicality of fiscal policy with propensity scores-matching techniques, thus mitigating traditional self-selection problems. It finds that not all fiscal rules have the same impact: the design matters. Specifically, investment-friendly rules reduce the procyclicality of both overall and investment spending. The effect appears stronger in bad times and when the rule is enacted at the national level. The introduction of escape clauses in fiscal rules does not seem to affect the cyclical stance of public spending. The inclusion of cyclical adjustment features in spending rules yields broadly similar results. The results are mixed for cyclically-adjusted budget balance rules: enacting the latter is associated with countercyclical movements in overall spending, but with procyclical changes in investment spending. Structural factors, such as past debt, the level of development, the volatility of terms of trade, natural resources endowment, government stability, and the legal enforcement and monitoring arrangements backing the rule also influence the link between fiscal rules and countercyclicality. The results are robust to a wide set of alternative specifications.

You may also like...