The Welfare Implications of Uncertain Growth Rates for Stabilization Policy PDF Download
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Author: Michael Sampson
Publisher:
ISBN:
Category :
Languages : en
Pages : 29
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Book Description
Author: Michael Sampson
Publisher:
ISBN:
Category :
Languages : en
Pages : 29
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Book Description
Author: Michael Sampson
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 29
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Book Description
Author: Michael Sampson
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
Author: Concordia University (Montréal, Québec). Department of Economics
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 44
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Book Description
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: Pengfei Wang
Publisher:
ISBN:
Category :
Languages : en
Pages :
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"This paper proposes a simple endogenous-fluctuations growth model to show: (1) long-run growth and short-run fluctuations can be intimately linked; in particular, the rate of long run growth can be negatively affected by volatilities; (2) imperfect competition can cause endogenous fluctuations, and it reduces not only the level of output but also its mean growth rate by amplifying the volatility of the economy; and (3) the welfare gain of stabilization policy can be enormous (e.g., as high as 25% of annual consumption when calibrated to the U.S. data) because policies designed to reduce sunspots-driven fluctuations can generate permanently higher rates of growth"--Federal Reserve Bank of St. Louis web site.
Author: Willem H. Buiter
Publisher: University of Michigan Press
ISBN: 9780472101382
Category : Economic development
Languages : en
Pages : 392
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Book Description
Brings together Buiter's major papers on macroeconomic theory and policy
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Steven P. Cassou
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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This paper investigates a variety of objectives that are commonly used to motivate government fiscal action. These include welfare maximization, stabilization and growth maximization. The policies are compared on the basis of their implications for welfare, volatility and growth. We show that stabilization policies can produce welfare levels that are nearly identical to those of welfare maximization policies and that both welfare maximization and stabilization policies yield large welfare gains and modest growth losses relative to growth maximization policies. We also show that there are side issues to stabilization polices. In particular: 1) It is not possible to stabilize all macroeconomic variables simultaneously, even when the number of policy instruments is equal to the number of shocks; 2) stabilizing a particular variable requires increased volatility of some other variable; 3) stabilization requires some flexibility regarding the government's budget constraint; and 4) stabilization requires the government to respond in a precise and immediate way to exogenous shocks which hit the economy.
Author: Joshua Aizenman
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
This paper studies the effect of policy uncertainty on the formation of new activities in Romer's (1994) type of an economy, where productivity of labor increases with the number of capital goods. Adding a new capital good requires a capital specific set-up cost, invested prior to using the capital good. Agents are disappointment averse, putting greater utility weight on downside risk [as modeled by Gul (1991)]. Policy uncertainty is induced by the Disappointment aversion implies that investment, labor and capitalists' income drop at a rate proportional to the standard deviation of the tax rate. Hence, policy uncertainty induces first-order adverse effects, whereas policy uncertainty leads to second-order effects when consumers maximize the conventional expected utility. The adverse effects of policy uncertainty can be partially overcome by a proper investment policy. The paper interprets the tax concessions granted to multinationals as a commitment device that helps overcoming the adverse implications of policy uncertainty.
