FISCAL POLICY AND THE GOVERNMENT BUDGET CONSTRAINT UNDER ALTERNATIVE EXCHANGE-RATE SYSTEMS
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The Iranian economy under the Islamic Republic has been strongly influenced by factors which lie for the most part outside the Iranian government's control, in particular lower oil sales due to the Iraqi attack and to the world-wide oil glut. One should not underestimate, however, the impact of the policies which have traditionally most concerned economists, namely, the government budget and monetary matters. The major thesis of this article is that the Islamic Republic's economy has been heavily influenced by an overvalued exchange rate which has: (a) forced reductions in government development spending; (b) fueled inflation as the government printed money to finance its deficit; (c) worsened the imbalance in foreign trade by encouraging imports and discouraging non-oil exports; (d) subsidized the consumption of imported goods, primarily benefiting the urban population, especially the rich; (e) distorted the allocation of resources in favor of commerce at the expense of production; and (f) benefited well-to-do merchants at the expense of poorer farmers and artisans.

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Is Real Depreciation or More Government Deficit Expansionary? The Case of Slovenia

South East European Journal of Economics and Business ◽

10.1515/jeb-2017-0005 ◽

2017 ◽

Vol 12 (1) ◽

pp. 50-56 ◽

Cited By ~ 1

Author(s):

Yu Hsing

Keyword(s):

Exchange Rate ◽

Fiscal Policy ◽

Real Exchange Rate ◽

Central Government ◽

Empirical Work ◽

Labor Cost ◽

Aggregate Output ◽

The Real ◽

Government Deficit ◽

The Government

AbstractThe purpose of this paper is to examine the impacts of the real exchange rate, the government deficit and other relevant variables on aggregate output in Slovenia. Few of the previous studies have applied the AD/AS model to examine the impacts of major macroeconomic variables on aggregate output. This paper makes contributions to the literature by applying a rigorous model to examine how real GDP is affected by the real exchange rate, fiscal policy and other related variables. The exponential GARCH model is applied in empirical work. The paper finds that real depreciation of the Euro may affect Slovenia’s aggregate output positively or negatively and that more central government deficit as a percent of GDP does not affect aggregate output. In addition, Slovenia’s aggregate output is positively associated with the real stock price, the real oil price and real total labor cost or wage and is negatively influenced by the real lending rate and the expected inflation rate. Recent real depreciation of the Euro would help Slovenia’s aggregate output whereas expansionary fiscal policy would not be effective in stimulating the economy.

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Challenges of President Dilma Rousseff’s Second Term

Brazilian Keynesian Review ◽

10.33834/bkr.v1i1.29 ◽

2015 ◽

Vol 1 (1) ◽

pp. 103-107 ◽

Cited By ~ 1

Author(s):

José Luis da Costa Oreiro

Keyword(s):

Exchange Rate ◽

Real Exchange Rate ◽

Federal Government ◽

Manufacturing Industry ◽

Government Budget ◽

Short Term ◽

Fundamental Challenge ◽

The Government

This paper aims at analysing the challenges that will be faced by the President of the Brazil, Dilma Rousseff, in her second term in office. We argue that the fundamental challenge to the federal government is to restore the dynamism of the manufacturing industry, which requires a significant, nevertheless gradual, real exchange rate devaluation. Thus, the necessary government budget adjustment must be focused on tax increases in the short term and on the containment of the growth pace of the government current spending.

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