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Perceptions and Misperceptions of Fiscal Inflation
Walker, Todd B. - 2014
The Great Recession and worldwide financial crisis have exploded fiscal imbalances and brought fiscal policy and inflation to the forefront of policy concerns. Those concerns will only grow as aging populations increase demands on government expenditures in coming decades. It is widely perceived...
Persistent link: https://www.econbiz.de/10013067018
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Modelling Yields at the Lower Bound Through Regime Shifts
Hördahl, Peter - 2019
We propose a regime-switching approach to deal with the lower bound on nominal interest rates in dynamic term structure modelling. In the "lower bound regime", the short term rate is expected to remain constant at levels close to the effective lower bound; in the "normal regime", the short rate...
Persistent link: https://www.econbiz.de/10012861844
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Cyclical Macroeconomic Policy, Financial Regulation and Economic Growth
Aghion, Philippe - 2014
This paper investigates the effect of cyclical macroeconomic policy and financial sector characteristics on growth. Using cross-country, cross-industry OECD data, it yields two main findings. First, countercyclical fiscal and monetary policies foster growth disproportionately in more...
Persistent link: https://www.econbiz.de/10013058584
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Output Gaps and Policy Stabilisation in Latin America : The Effect of Commodity and Capital Flow Cycles
Alberola, Enrique - 2016
We provide a measure of the output gap that filters out the impact of the commodity and net capital inflows booms for … Latin American countries. These two factors temporarily boost output and so are likely to push up estimates of potential … growth in the region to unrealistic levels, thereby resulting in an underestimation of the output gaps during the upswing of …
Persistent link: https://www.econbiz.de/10012989062
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Is the Long-Term Interest Rate a Policy Victim, a Policy Variable or a Policy Lodestar?
Turner, Philip - 2014
Few financial variables are more fundamental than the 'risk free' real long-term interest rate because it prices the terms of exchange over time. During the past 15 years, it has dropped from a range of 4 to 5% to a range of 0 to 2%. By late 2011, cyclical factors had driven it close to zero....
Persistent link: https://www.econbiz.de/10013066952
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A Risk-Centric Model of Demand Recessions and Macroprudential Policy
Caballero, Ricardo J. - 2019
output is determined by aggregate demand. If the interest rate is constrained, a rise in the risk premium lowers asset prices …
Persistent link: https://www.econbiz.de/10012898808
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Long-Term Fiscal Sustainability in Major Economies
Auerbach, Alan J. - 2014
As the world economy slowly recovers from the very deep and widespread recession of recent years, many countries confront very serious fiscal imbalances. How much time they have to deal with these imbalances is a central question, the salience of which can only have been increased by the ongoing...
Persistent link: https://www.econbiz.de/10013067011
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The 'Austerity Myth' : Gain Without Pain?
Perotti, Roberto - 2014
As governments around the world contemplate slashing budget deficits, the 'expansionary fiscal consolidation hypothesis' is back in vogue. I argue that, as a statement about the short run, it should be taken with caution. Alesina and Perotti (1995) and Alesina and Ardagna (2010) (AAP) have...
Persistent link: https://www.econbiz.de/10013067012
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Cyclical Fiscal Policy, Credit Constraints, and Industry Growth
Aghion, Philippe - 2014
This paper analyzes the impact of cyclical fiscal policy on industry growth. Using Rajan and Zingales' (1998) difference-in-difference methodology on a panel data sample of manufacturing industries across 15 OECD countries over the period 1980-2005, we show that industries with relatively...
Persistent link: https://www.econbiz.de/10013067917
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Assessing Fiscal Policy Through the Lens of the Financial and the Commodity Price Cycles
Alberola, Enrique - 2017
We assess the link between fiscal policy and credit and commodity price booms and busts. We do so by investigating the impact of financial and commodity price cycles on the identification of episodes of fiscal consolidation and stimulus and the size of the fiscal impulse. We find that...
Persistent link: https://www.econbiz.de/10012956192