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Fiscal targeting rules and macroeconomic stability under distortionary taxation
Reicher, Claire A. - 2014 - This version: September 30, 2014
While European countries have engaged in a debate about fiscal policy rules, little is known about the ability of these rules to ensure stable debt and output paths when taxes are distortionary, particularly in a small open economy. In this situation, it turns out that the interaction between a...
Persistent link: https://www.econbiz.de/10010427960
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Uncertain fiscal consolidations
Bi, Huixin; Leeper, Eric M.; Leith, Campbell B. - 2013
The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition - either tax- or spending-based - are uncertain. We find that the composition of the fiscal consolidation, its duration, the monetary policy stance, the level of government debt, and...
Persistent link: https://www.econbiz.de/10009781108
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Fiscal consolidations and heterogeneous expectations
Hommes, Cars H.; Lustenhouwer, Joep; Mavromatis, Kostas - 2017
We analyze fiscal consolidations using a New Keynesian model where agents have heterogeneous expectations and are uncertain about the composition of consolidations. We look at spending-based and tax-based consolidations and analyze their effects separately. We find that the effects of...
Persistent link: https://www.econbiz.de/10011770688
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Do Fiscal Rules Cause Better Fiscal Balances? A New Instrumental Variable Strategy
Caselli, Francesca - 2019
This paper estimates the causal effect of fiscal rules on fiscal balances in a panel of 142 countries over the period 1985-2015. Our instrumental variable strategy exploits the geographical diffusion of fiscal rules across countries. The intuition is that reforms in neighboring countries may...
Persistent link: https://www.econbiz.de/10012889142
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Cost of Borrowing Shocks and Fiscal Adjustment
de Groot, Oliver - 2013
shock. We also find that the bulk of fiscal adjustment takes place via a rise in government revenue rather than a cut in …-to-GDP ratio from rising as a consequence of the shock. Sub-dividing our sample, we also find that for countries participating in … Economic and Monetary Union (EMU) the primary balance response to a cost of borrowing shock was stronger in the period after …
Persistent link: https://www.econbiz.de/10013089247
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Cost of Borrowing Shocks and Fiscal Adjustment
de Groot, Oliver - 2013
percentage points over 10 years, with the fiscal response becoming significantly evident only two years after the shock. We also … from rising as a consequence of the shock. Sub-dividing our sample, we also find that for countries participating in … Economic and Monetary Union (EMU) the primary balance response to a cost of borrowing shock was stronger in the period after …
Persistent link: https://www.econbiz.de/10013073600
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Myths and maths: macroeconomic effects of fiscal adjustments in Hungary
Horváth, Ágnes; Jakab, M. Zoltán; Kiss, Gábor P.; … - 2006
In this paper we investigate the possible effects of fiscal tightening in Hungary from two perspectives. First, simulations in an estimated neo-Keynesian model are used to characterise the effects of different scenarios for fiscal consolidations. We show that the composition of fiscal shocks is...
Persistent link: https://www.econbiz.de/10003347824
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Fiscal and monetary policy rules in an unstable economy
Ryoo, Soon; Skott, Peter - 2015
This paper examines the implications of different monetary and fiscal policy rules in an economy characterized by Harrodian instability. We show that (i) a monetary rule along Taylor lines can be stabilizing for low debt ratios but becomes de-stabilizing if the debt ratio exceeds a certain...
Persistent link: https://www.econbiz.de/10011522169
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Fiscal Consolidation and Macroeconomic Challenges in Brazil
Azevedo, Cyntia F. - 2013
This paper explores two important points regarding the Brazilian fiscal framework. The first part analyses the significant improvement of the fiscal stance in the last decade as the result of the promotion of fiscal discipline and debt management policies. This consolidation is argued to be one...
Persistent link: https://www.econbiz.de/10013088185
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Back to the Future : Fiscal Rules for Regaining Sustainability
Cevik, Serhan - 2019
This paper assesses the cyclicality and sustainability of fiscal policy in Belize and applies a stochastic simulation model to determine the optimal set of fiscal rules. The empirical analysis shows that fiscal policy in Belize has been significantly procyclical and unsustainable much of the...
Persistent link: https://www.econbiz.de/10012858382