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Author: Randall P. Mariger
Publisher: Harvard University Press
ISBN: 9780674166356
Category : Business & Economics
Languages : en
Pages : 292
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Book Description
In Consumption Behavior and the Effects of Government Fiscal Policies, Randall Mariger explores how people make decisions about how much to consume and save over their lifetimes. An understanding of these issues illuminates not only individual behavior but important properties of the macro economy as well. The most popular framework for analyzing consumption has been the life-cycle theory. Mariger tests two fundamental, and controversial, assumptions underlying the theory--that there are no planned bequests and that human capital is marketable. To do this, he fits a structural consumption model that incorporates endogenous liquidity constraints (non-marketability of human capital), but no planned bequests, to data on a cross-section of U. S. families. This estimated model, in conjunction with estimates of alternative models, enables him to make inferences about the respective effects of liquidity constraints and social security wealth on consumption. This latter effect yields indirect evidence concerning planned bequests. Mariger also presents direct evidence concerning bequest behavior. Among his findings are that the model fits the data very well in spite of its tight theoretical structure; that liquidity constraints are prevalent and have important effects on consumption behavior; that planned bequests appear not to be common among families in the lower 99.1% of the wealth distribution; and that families in the upper 0.9% of the wealth distribution appear to plan substantial bequests. Mariger devotes the latter part of his book to studying the implications of his estimated consumption model for the effects of government fiscal policies. More specifically, he simulates the model to infer the effects of government tax/debt policy, as well as those of the social security system, on aggregate savings.
Author: Randall P. Mariger
Publisher: Harvard University Press
ISBN: 9780674166356
Category : Business & Economics
Languages : en
Pages : 292
Get Book Here
Book Description
In Consumption Behavior and the Effects of Government Fiscal Policies, Randall Mariger explores how people make decisions about how much to consume and save over their lifetimes. An understanding of these issues illuminates not only individual behavior but important properties of the macro economy as well. The most popular framework for analyzing consumption has been the life-cycle theory. Mariger tests two fundamental, and controversial, assumptions underlying the theory--that there are no planned bequests and that human capital is marketable. To do this, he fits a structural consumption model that incorporates endogenous liquidity constraints (non-marketability of human capital), but no planned bequests, to data on a cross-section of U. S. families. This estimated model, in conjunction with estimates of alternative models, enables him to make inferences about the respective effects of liquidity constraints and social security wealth on consumption. This latter effect yields indirect evidence concerning planned bequests. Mariger also presents direct evidence concerning bequest behavior. Among his findings are that the model fits the data very well in spite of its tight theoretical structure; that liquidity constraints are prevalent and have important effects on consumption behavior; that planned bequests appear not to be common among families in the lower 99.1% of the wealth distribution; and that families in the upper 0.9% of the wealth distribution appear to plan substantial bequests. Mariger devotes the latter part of his book to studying the implications of his estimated consumption model for the effects of government fiscal policies. More specifically, he simulates the model to infer the effects of government tax/debt policy, as well as those of the social security system, on aggregate savings.
Author: Ms.Rina Bhattacharya
Publisher: International Monetary Fund
ISBN: 1451853580
Category : Business & Economics
Languages : en
Pages : 29
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Book Description
This paper explores the hypothesis that the propensity to consume out of income is not constant but varies, perhaps in a nonlinear fashion, with fiscal variables. It examines whether there is any empirical evidence to support the hypothesis that households move from non-Ricardian to Ricardian behavior as government debt reaches high levels and as uncertainty about future taxes increases. The paper also examines the possibility of a relationship (along the lines of the Bertola-Drazen model) between the propensity to consume out of income and the government consumption-to-GDP ratio.
Author: Alberto Alesina
Publisher: University of Chicago Press
ISBN: 022601844X
Category : Business & Economics
Languages : en
Pages : 596
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Book Description
The recent recession has brought fiscal policy back to the forefront, with economists and policy makers struggling to reach a consensus on highly political issues like tax rates and government spending. At the heart of the debate are fiscal multipliers, whose size and sensitivity determine the power of such policies to influence economic growth. Fiscal Policy after the Financial Crisis focuses on the effects of fiscal stimuli and increased government spending, with contributions that consider the measurement of the multiplier effect and its size. In the face of uncertainty over the sustainability of recent economic policies, further contributions to this volume discuss the merits of alternate means of debt reduction through decreased government spending or increased taxes. A final section examines how the short-term political forces driving fiscal policy might be balanced with aspects of the long-term planning governing monetary policy. A direct intervention in timely debates, Fiscal Policy after the Financial Crisis offers invaluable insights about various responses to the recent financial crisis.
Author: Troy Davig
Publisher:
ISBN:
Category : Fiscal policy
Languages : en
Pages : 39
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Book Description
Increases in government spending trigger substitution effects-both inter- and intra-temporal-and a wealth effect. The ultimate impacts on the economy hinge on current and expected monetary and fiscal policy behavior. Studies that impose active monetary policy and passive fiscal policy typically find that government consumption crowds out private consumption: higher future taxes create a strong negative wealth effect, while the active monetary response increases the real interest rate. This paper estimates Markov-switching policy rules for the United States and finds that monetary and fiscal policies fluctuate between active and passive behavior. When the estimated joint policy process is imposed on a conventional new Keynesian model, government spending generates positive consumption multipliers in some policy regimes and in simulated data in which all policy regimes are realized. The paper reports the model's predictions of the macroeconomic impacts of the American Recovery and Reinvestment Act's implied path for government spending under alternative monetary-fiscal policy combinations.
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: Donijo Robbins
Publisher: Routledge
ISBN: 135156434X
Category : Political Science
Languages : en
Pages : 796
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Book Description
The Handbook of Public Sector Economics builds an understanding of the role of public economics in public administration, public policy, and decision making. The handbook introduces a wide variety of current issues related to the public provision and production of goods and services. The volume documents the history of economics and fiscal doctrine, explores the theory of public goods and the structures from which resources are collected and expanded, and analyzes heavily debated issues of economics that are important to current and future practitioners of public policy and administration. It focuses on the effects of fiscal policy on savings and investment, consumer behavior, labor supply, wealth, property, and trade. Written in a simple and straightforward style, the initial chapters establish the foundation of public economics, with the subsequent chapters addressing the collection and distribution of government resources and market reactions to fiscal policies.
Author: Troy Davig
Publisher:
ISBN:
Category : Fiscal policy
Languages : en
Pages : 0
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Book Description
Increases in government spending trigger substitution effects-both inter- and intra-temporal-and a wealth effect. The ultimate impacts on the economy hinge on current and expected monetary and fiscal policy behavior. Studies that impose active monetary policy and passive fiscal policy typically find that government consumption crowds out private consumption: higher future taxes create a strong negative wealth effect, while the active monetary response increases the real interest rate. This paper estimates Markov-switching policy rules for the United States and finds that monetary and fiscal policies fluctuate between active and passive behavior. When the estimated joint policy process is imposed on a conventional new Keynesian model, government spending generates positive consumption multipliers in some policy regimes and in simulated data in which all policy regimes are realized. The paper reports the model's predictions of the macroeconomic impacts of the American Recovery and Reinvestment Act's implied path for government spending under alternative monetary-fiscal policy combinations.
Author: Giorgio Rodano
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 44
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Book Description
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451931239
Category : Business & Economics
Languages : en
Pages : 33
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Book Description
In pursuing a steady-state reserve target, policymakers in small open economies can resort to devaluation or to temporary increases in public saving. This paper contrasts the dynamic implications of these alternative policies in a model with optimizing agents who possess perfect foresight. In general, the private sector cannot be insulated from the effects of the government’s reserve-accumulation policies. The dynamic effects of devaluation depend on the fiscal policy rule in effect. In contrast to devaluation, the “equivalent” fiscal policies imply discontinuities in private consumption and temporary tax increases may cause key macroeconomic variables to overshoot their steady-state values.
Author: William J. Congdon
Publisher: Brookings Institution Press
ISBN: 0815704984
Category : Business & Economics
Languages : en
Pages : 260
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Book Description
Argues that public finance--the study of the government's role in economics--should incorporate principles from behavior economics and other branches of psychology.
