DEBT POLICY RULE, PRODUCTIVE GOVERNMENT SPENDING, AND MULTIPLE GROWTH PATHS

2008 ◽  
Vol 12 (4) ◽  
pp. 445-462 ◽  
Author(s):  
Koichi Futagami ◽  
Tatsuro Iwaisako ◽  
Ryoji Ohdoi
Keyword(s):  
Growth Rate ◽  
Steady State ◽  
Government Spending ◽  
Income Tax ◽  
High Growth ◽  
Government Debt ◽  
Government Bonds ◽  
Tax Rate ◽  
Productive Government Spending ◽  
The Government

This paper constructs an endogenous growth model with productive government spending. In this model, the government can finance its costs through income tax and government debt and has a target level of government debt relative to the size of the economy. We show that there are two steady states. One is associated with high growth and the other with low growth. It is also shown that whether the government uses income taxes or government bonds makes the results differ significantly. In particular, an increase in government bonds reduces the growth rate in the high-growth steady state and raises the growth rate in the low-growth steady state. Conversely, an increase in the income tax rate reduces the growth rate in the low-growth steady state and there exists some tax rate that maximizes the growth rate in the high-growth steady state. Finally, the level of welfare in the low-growth steady state is lower than that in the high-growth steady state.

scholarly journals The Resilience of Indonesia’s State Budget against Central Government Debt

2020 ◽  
Vol 006 (02) ◽  
pp. 325-330
Author(s):  
Nugroho Suryo Bintoro
Keyword(s):  
Government Spending ◽  
Central Government ◽  
Government Debt ◽  
Infrastructure Development ◽  
State Budget ◽  
The Subject ◽  
The Government ◽  
Term Data ◽  
Made In

The growth of central government debt in Indonesia is the subject of endless discussion for both economists and experts in other fields. Although the government uses this debt in order to increase Indonesia's competence through infrastructure development, there are problems in the form of previous accumulated debts. This accumulative debt is known as the concept of “debt stock” which is assessed through Indonesia's fiscal resilience (APBN) to measure the repayment capacity of new debts that will be made in the future. This ability will be seen using long-term data from 1990 to 2016 which is reflected in the variables of central government debt, government spending and revenue so that it is known that Indonesia's central government debt can still be said to be sustainable and the Indonesian government should prioritize productive expenditures in order to increase government revenues.

scholarly journals Firm Growth and R&D in the Korean Pharmaceutical Industry

2019 ◽  
Vol 11 (10) ◽  
pp. 2865 ◽  
Author(s):  
Hyunseog Chung ◽  
Soomin Eum ◽  
Chulung Lee
Keyword(s):  
Growth Rate ◽  
Pharmaceutical Industry ◽  
Firm Growth ◽  
Negative Relationship ◽  
High Growth ◽  
Sales Growth ◽  
Young Firms ◽  
The Government ◽  
The Impact ◽  
Positive Effect

We explore the impact of research and development (R&D) on sales growth rate with firm-specific factors under the Korean pharmaceutical industry structure using listed Korea pharmaceutical company data from 2007 to 2018 with the quantile regression technique. We find that R&D intensity has a positive effect on firm growth rate while R&D scale a negative effect on the firm growth rate at the upper quantile, whereas the result is opposite at the lower quantile. Firm size has a mixed relationship with sales growth at the upper quantile, thus Gibrat’s law is rejected in the Korean pharmaceutical industry. Firm age has a negative relationship with the sales growth rate at the upper quantile, which shows the consistent result with previous research that young firms grow faster. Patent persistence has a negative relationship with sales growth at the upper quantile, while a positive effect at the lower quantile. We show that young firms and firms with high R&D intensity contribute to the high growth rate, while the relationship is not clear at the lower quantile. Therefore, policy implication in this research is that the government should pay attention to encouraging and supporting R&D investment activities and small firms as well as consider ways to enhance patent rights.

scholarly journals Directions of government debt securities market development

2021 ◽  
Vol 12 (2) ◽  
Author(s):  
Yuliia Nehoda ◽  
Keyword(s):  
Foreign Currency ◽  
Government Debt ◽  
Time Frame ◽  
Securities Market ◽  
Debt Structure ◽  
State Budget ◽  
Government Bonds ◽  
Trading Systems ◽  
The Government ◽  
Foreign Currency Debt

The securities market is a powerful platform to accumulate capitals for further investment in favor of structural reconstruction of economy, increasing population welfare level at the cost of fund financial instrument holding. As one of financial instruments the government debt securities gained widespread use as reliable, easy-to-use and readily obtainable financial assets. The place of bonds of domestic government loan in the formation of Ukraine’s public debt and financing of the state budget deficit is highlighted in the article. The modern statistics confirms the safety and viability for the use of internal government debt securities, and the author in made research proves significant increase of amounts attracted to budget financial fund from Ukrainian domestic government bonds settlement. The article systemizes the data on main indicators of the domestic market of Ukrainian domestic government bonds, determines the portfolio structure on the basis of ownership and describes ways to expand range of potential investors, for example, by involving physical entities. Several banks – primary dealers were chosen to analyze the purchase terms of Ukrainian domestic government bonds for citizens of Ukraine on the primary market. The directions of developments of domestic internal bet market was determined, and they are to strengthen communication with fund market participants, to concentrate liquidity in certain instruments, to protect investors multilateral trading systems, to make pricing transparent on the Ukrainian domestic government bonds market, to arrange auctions regularly, diversification of foreign currency debt structure portfolio etc. The well-structured process of Ukrainian domestic government bonds emission in the part of public debts management strategy will allow to hold investors with such investment time frame interested to obtain instruments in the mid-run.

scholarly journals Realisasi Pengeluaran Pemerintah Daerah Terhadap Pertumbuhan Ekonomi di Provinsi Sumatera Barat

2020 ◽  
Vol 4 (1) ◽  
pp. 136
Author(s):  
Yuliarti Yuliarti
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Government Spending ◽  
Statistical Tests ◽  
Average Growth ◽  
Regional Autonomy ◽  
National Budget ◽  
Regional Budget ◽  
West Sumatra ◽  
The Government

To create positive economic growth and maintain economic stability, the role of the government is needed. The implementation of regional autonomy since early 2001 is a form of government strategy to encourage economic growth not only in the regions around the center but also in areas that are far from the center's reach. The implementation of regional autonomy is in accordance with Law No.22 of 1999 concerning regional autonomy, as well as Law No. 32 of 2004 concerning local government. The government can regulate the course of the economy by determining the amount of government revenue and expenditure each year, which is reflected in the National Budget (APBN) for the national budget and the Regional Budget (APBD) for the region or region. This government expenditure is a form of fiscal policy. During the period of 2010-2019, it can be seen that the realization of the expenditure of the government of West Sumatra is more used for indirect expenditure than direct expenditure. For the average economic growth rate over the past ten years, West Sumatra has the second highest average growth rate compared to other provinces, which is 2.24%, but the growth rate per year is still fluctuating and even more often decreases in percentage. Therefore, the authors are interested in examining how the influence of the realization of government spending on economic growth in West Sumatra. The purpose of this study is to find out how much influence the realization of government spending on economic growth in West Sumatra Province. This research uses quantitative data. The data analysis model used is simple linear regression and includes statistical tests. The results of the study show that government spending has a significant effect on economic growth in the province of West Sumatra.

scholarly journals Study on system fairness dimensions and tax compliance in the Middle East context

2020 ◽  
Vol 18 (1) ◽  
pp. 181-191 ◽  
Author(s):  
Saeed Awadh Bin-Nashwan ◽  
Ahmed Mubarak Al-Hamedi ◽  
Munusamy Marimuthu ◽  
Abobakr Ramadhan Al-Harethi
Keyword(s):  
Middle East ◽  
Income Tax ◽  
Tax Compliance ◽  
General System ◽  
Analysis Tool ◽  
Tax System ◽  
Tax Rate ◽  
Compliance Behavior ◽  
Self Interest ◽  
The Government

People’s perceptions of a fair tax administration system have garnered growing interest as a decisive ingredient that can install compliance behavior among taxpayers. The tax that taxpayers wish to evade is determined by their perceptions of the various robust dimensions of fairness (i.e., general fairness, preferred tax rate structure, exchange with the government, special provisions, and self-interest). Such an important matter, like tax fairness, has been overlooked in the extant literature, especially in the Middle East context, although tax administrations still suffer from low and unsatisfactory rates of compliance. This paper aims to empirically examine the influence of fairness perceptions of the income tax system on compliance behavior of taxpayers in Yemen. The study used a survey questionnaire administered to 400 individual taxpayers in Hadhramout, one of the most prosperous business regions in Yemen. Based on the PLS-SEM analysis tool, the study found that general system fairness, preferred tax rate, exchange with the government, and the extent of self-interest are significantly related to income tax compliance, while special provisions do not affect compliance decisions. The results of the study can alert the tax authority and policymakers to consider the non-pecuniary factors, other than the measures of the coercion. Establishing a fair tax system is probably one of the most successful approaches to boost compliance among taxpayers, thus yielding more tax revenue and diminishing the administrative cost for the tax authority.

scholarly journals Government borrowing as a Ponzi scheme: the case of Bangladesh

2021 ◽  
Vol 10 (1) ◽  
pp. 81-86
Author(s):  
Syed Yusuf Saadat
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Interest Rate ◽  
Real Interest Rate ◽  
Government Debt ◽  
Economic Growth Rate ◽  
The Real ◽  
Ponzi Scheme ◽  
The Government

This study investigates whether government borrowing can be likened to a Ponzi scheme which will allow the government to roll-over its debt perpetually. The results show that, on the basis of the condition of maintaining real economic growth rate above and beyond the real interest rate on government debt, it will not be possible to sustain a perpetual Ponzi scheme of all four types of National Savings Certificates in Bangladesh. The government’s debt may be rolled over perpetually for two types of National Savings Certificates, following the condition outlined in Ball, et al. (1998), or for three types of National Savings Certificates following the condition outlined in Mehrotra (2017). 

scholarly journals Penyesuaian Lapisan dan Tarif PPh Orang Pribadi: Agresif atau Progresif?

Owner ◽  
2022 ◽  
Vol 6 (1) ◽  
pp. 709-721
Author(s):  
Kalyana Mitta Kristanti
Keyword(s):  
Income Tax ◽  
Positive Impact ◽  
Personal Income ◽  
Tax Rates ◽  
Personal Income Tax ◽  
Middle Income ◽  
Tax Rate ◽  
Tax Harmonization ◽  
The Difference ◽  
The Government

In 2022, Indonesia would apply changes in tax brackets and rates for personal income tax. This adjustment is based on the Article 17 Paragraph 1 Tax Harmonization Law Number 7 of 2021. The government tries to accommodate the needs of the community through formulating process of this regulation. In particular, it provides convenience to the lower-middle income community and encourages an even distribution of income. People belonging to the high wealth income will be subject to the highest tariffs that have just been set through this law. Through a qualitative descriptive method in which data collection is carried out by taking from literature review; law, articles, books, and website, the author tries to analyze changes in brackets and rates of personal income tax. This study presents illustrations of the calculation to explain the difference in the amount of income tax payable before and after the implementation of the Tax Harmonization Law. In addition, the analysis of the principles of equity and democracy on the adjustment of layers and tax rates is elaborated in this paper. The results obtained explain that with the application of the new tax rate, taxpayers get a tax burden relief because the tax expense is lower due to the broadening of income range. However, wealthy taxpayers will pay more taxes because of the higher tax rates. This condition proves that the new tax rate supports vertical fairness in the taxation system. In addition, the implementation of regulations related to tax rates adjustment provides evidence that the implementation of democracy has been implemented. The adjustment of tax brackets and rates has a positive impact on the community and the government so that the allocation of tax revenues can run optimally to support the welfare of the community.

scholarly journals Kenapa Wajib Pajak UMKM Enggan Membayar Pajak Penghasilan?

2020 ◽  
Vol 30 (6) ◽  
pp. 1561
Author(s):  
Ni Putu Rossica Sari ◽  
Agus Fredy Maradona
Keyword(s):  
Income Tax ◽  
Theory Of Planned Behaviour ◽  
Research Setting ◽  
Planned Behaviour ◽  
Tax Rate ◽  
Tax Revenues ◽  
Compliance Level ◽  
Service Areas ◽  
Primary Determinant ◽  
The Government

To boost tax revenues from the SMEs sector, the government has reduced the income tax rate for SMEs through the issuance of PP Number 23 of 2018. Nevertheless, in some regions, the tax revenues from the SMEs sector have, unexpectedly, decreased. The purpose of this study is to investigate the reasons for the lack of compliance by SME taxpayers, using the theory of planned behaviour as a theoretical framework. This study employed an exploratory design using a qualitative approach, in which the service areas of the Singaraja tax office served as the research setting. The results of this study show that the primary determinant of SME taxpayers’ compliance in paying income tax is the taxpayers’ consciousness concerning the importance of tax revenues for the country’s financial wellbeing. This finding provides significant implications for the Indonesian tax authority concerning their mission to increase the compliance level of SMEs taxpayers in fulfilling their tax obligations. Keywords: Taxpayer Compliance; SME; PP Number 23 Of 2018; Taxpayer Awareness; Theory Of Planned Behaviour.

scholarly journals Testing the Ricardian equivalence hypothesis in the case of Ethiopia: An autoregressive-distributed lag approach

2020 ◽  
Vol 3 (2) ◽  
pp. 26-49
Author(s):  
Sisay Demissew Beyene ◽  
Balázs Kotosz
Keyword(s):  
Government Spending ◽  
Budget Deficit ◽  
Government Debt ◽  
Annual Data ◽  
Ricardian Equivalence ◽  
Consumption Expenditure ◽  
Government Consumption ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
The Government

The Ricardian equivalence hypothesis (REH) suggests that when the government attempts to stimulate the economy by raising debt-financed government spending, consumption and demand do not increase but rather remain the same. The objective of this study is to test the existence of the REH in Ethiopia, using annual data from 1990 to 2011 and by employing the autoregressive-distributed lag cointegration approach. The study includes three variables (budget deficit, government consumption expenditure, and government debt) which contribute to the REH along with another variable. The results show that only the budget deficit and government consumption expenditure fulfil the REH. However, government debt fails to fulfil it. Thus, limited evidence of the existence of the REH is found in Ethiopia.

TWO COMPUTATIONS TO FUND SOCIAL SECURITY

1997 ◽  
Vol 1 (1) ◽  
pp. 7-44 ◽  
Author(s):  
HE HUANG ◽  
SELAHATTIN İMROHOROGˇLU ◽  
THOMAS J. SARGENT
Keyword(s):  
Social Security ◽  
Income Tax ◽  
Physical Capital ◽  
Labor Income ◽  
Income Volatility ◽  
Public Provision ◽  
Tax Rate ◽  
Output Ratio ◽  
The Government ◽  
The Impact

We use a general equilibrium model to study the impact of fully funding social security on the distribution of consumption across cohorts and over time. In an initial stationary equilibrium with an unfunded social security system, the capital/output ratio, debt/output ratio, and rate of return to capital are 3.2, 0.6, and 6.8%, respectively. In our first experiment, we suddenly terminate social security payments but compensate entitled generations by a massive one-time increase in government debt. Eventually, the aggregate physical capital stock rises by 40%, the return on capital falls to 4.4%, and the labor income tax rate falls from 33.9 to 14%. We estimate the size of the entitlement debt to be 2.7 times real GDP, which is paid off by levying a 38% labor income tax rate during the first 40 years of the transition. In our second experiment, we leave social security benefits untouched but force the government temporarily to increase the tax on labor income so as gradually to accumulate private physical capital, from the proceeds of which it eventually finances social security payments. This particular government-run funding scheme delivers larger efficiency gains (in both the exogenous and endogenous price cases) than privatization, an outcome stemming from the scheme's public provision of insurance both against life-span risk and labor income volatility.

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