An Econometric Investigation of the Relative Effectiveness of Monetary and Fiscal Policy PDF Download
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Author: Javad Varzandeh
Publisher:
ISBN:
Category :
Languages : en
Pages : 122
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Book Description
Author: Javad Varzandeh
Publisher:
ISBN:
Category :
Languages : en
Pages : 122
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Book Description
Author: Dong-Hyeon Kim
Publisher:
ISBN:
Category : Monetary policy
Languages : en
Pages : 350
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Book Description
This dissertation revisits the issue of the relative effectiveness of monetary and fiscal policies with updated data and some distinctive features in the empirical approach. First, this study focuses on effects of the policies on disaggregated private spendings. It is to account for potentially heterogeneous effects of the policies on various economic activities by different agents. The spending measures are disaggregated components of private consumption expenditures and gross private domestic investment in the national income account. Second, this study explicitly considers some of transmission mechanisms of the policies. Two empirical studies with models incorporating two alternative transmission channels (the interest rate and broad credit channels) estimate indirect effects of the policies on the transmission variables as well as direct effects of the policies on the target variables. The econometric method used is the reduced-form unrestricted VAR approach. The first study with models incorporating the interest rate channel finds dominant effect of monetary policy over fiscal policy in both direct and indirect effects. It largely finds that changes in monetary indicators exert stronger effect on specific spending categories. And it finds transitory but significant liquidity effect, and no positive association between the real interest rate and the fiscal indicator. In the study with models incorporating the broad credit channel, however, the monetary dominance is not found as clearly as in the models with the interest rate channel. And it is found that both monetary and fiscal tightenings lead to a deterioration in the financial intermediation process. Overall, heterogeneity of the policy effects across disaggregated private spendings is prevailing. It is found that fiscal policy is more important to consumptions while monetary policy is more important to investments. It is notable that dominant effects of monetary indicators on residential construction and changes in manufacturing inventories are consistently found in this study. And some diagnostic checks find that the VAR models mainly examined do not suffer from influence of the ordering of variables or the omitted variable bias.
Author: Richard Hemming
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 62
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Book Description
This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1498344658
Category : Business & Economics
Languages : en
Pages : 257
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Book Description
This paper explores how fiscal policy can affect medium- to long-term growth. It identifies the main channels through which fiscal policy can influence growth and distills practical lessons for policymakers. The particular mix of policy measures, however, will depend on country-specific conditions, capacities, and preferences. The paper draws on the Fund’s extensive technical assistance on fiscal reforms as well as several analytical studies, including a novel approach for country studies, a statistical analysis of growth accelerations following fiscal reforms, and simulations of an endogenous growth model.
Author: John Sargent
Publisher:
ISBN: 9780802072634
Category : Business & Economics
Languages : en
Pages : 368
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Author: John B. Taylor
Publisher: University of Chicago Press
ISBN: 0226791262
Category : Business & Economics
Languages : en
Pages : 460
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Book Description
This timely volume presents the latest thinking on the monetary policy rules and seeks to determine just what types of rules and policy guidelines function best. A unique cooperative research effort that allowed contributors to evaluate different policy rules using their own specific approaches, this collection presents their striking findings on the potential response of interest rates to an array of variables, including alterations in the rates of inflation, unemployment, and exchange. Monetary Policy Rules illustrates that simple policy rules are more robust and more efficient than complex rules with multiple variables. A state-of-the-art appraisal of the fundamental issues facing the Federal Reserve Board and other central banks, Monetary Policy Rules is essential reading for economic analysts and policymakers alike.
Author: Mr.Steven Phillips
Publisher: International Monetary Fund
ISBN: 1484346785
Category : Business & Economics
Languages : en
Pages : 68
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Book Description
The External Balance Assessment (EBA) methodology has been developed by the IMF’s Research Department as a successor to the CGER methodology for assessing current accounts and exchange rates in a multilaterally consistent manner. Compared to other approaches, EBA emphasizes distinguishing between the positive empirical analysis and the normative assessment of current accounts and exchange rates, and highlights the roles of policies and policy distortions. This paper provides a comprehensive description and discussion of the 2013 version (“2.0”) of the EBA methodology, including areas for its further development.
Author: Mr.Abdul Abiad
Publisher: International Monetary Fund
ISBN: 1484361555
Category : Business & Economics
Languages : en
Pages : 26
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This paper provides new evidence of the macroeconomic effects of public investment in advanced economies. Using public investment forecast errors to identify the causal effect of government investment in a sample of 17 OECD economies since 1985 and model simulations, the paper finds that increased public investment raises output, both in the short term and in the long term, crowds in private investment, and reduces unemployment. Several factors shape the macroeconomic effects of public investment. When there is economic slack and monetary accommodation, demand effects are stronger, and the public-debt-to-GDP ratio may actually decline. Public investment is also more effective in boosting output in countries with higher public investment efficiency and when it is financed by issuing debt.
Author: Guillermo E. Perry
Publisher: World Bank Publications
ISBN: 0821370855
Category : Business & Economics
Languages : en
Pages : 354
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Book Description
Fiscal policy in Latin America has been guided primarily by short-term liquidity targets whose observance was taken as the main exponent of fiscal prudence, with attention focused almost exclusively on the levels of public debt and the cash deficit. Very little attention was paid to the effects of fiscal policy on growth and on macroeconomic volatility over the cycle. Important issues such as the composition of public expenditures (and its effects on growth), the ability of fiscal policy to stabilize cyclical fluctuations, and the currency composition of public debt were largely neglected. As a result, fiscal policy has often amplified cyclical volatility and dampened growth. 'Fiscal Policy, Stabilization, and Growth' explores the conduct of fiscal policy in Latin America and its consequences for macroeconomic stability and long-term growth. In particular, the book highlights the procyclical and anti-investment biases embedded in the region's fiscal policies, explores their causes and macroeconomic consequences, and asesses their possible solutions.
Author: Rupa Dheerasinghe
Publisher:
ISBN:
Category : Financial crises
Languages : en
Pages : 516
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Book Description
