scholarly journals Taxes and the Structure of Production

1998 ◽  
Vol 16 (2) ◽  
pp. 145-159 ◽  
Author(s):  
Walter Block
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Interest Rate ◽  
Business Cycle ◽  
Time Preference ◽  
Causal Relation ◽  
Austrian Business Cycle ◽  
The Business Cycle ◽  
The Interest Rate ◽  
Structure Of Production

Abstract In Austrian theory, the business cycle is caused by expansive monetary policy, which artificially lowers the interest rate below equilibrium rates, necessarily lengthening the structure of production. Can tax alterations also cause an Austrian business cycle? Only if they affect time preference rates, the determinant of the shape of the Hayekian triangle. It is the contention of this paper that changes in taxes possibly can (but need not) impact time preference rates. Thus there may be a causal relation between fiscal policy and the business cycle, but this is not a necessary connection, as there is between monetary policy and the business cycle. This is contentious, since some Austrians argue that there is a praxeological link between tax policy and time preference rates.

scholarly journals Cyclical Fluctuation, Growth, and Stabilization: An Empirical Investigation of Dual Policy Objectives in Bangladesh

2020 ◽  
Author(s):  
Richmond Sam Quarm ◽  
Mohamed Osman Elamin Busharads
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Business Cycle ◽  
Interest Rates ◽  
Money Supply ◽  
Macroeconomic Policy ◽  
Output Growth ◽  
Long Run ◽  
Short Run ◽  
The Business Cycle

In conventional economics, two types of macroeconomic policy i.e. fiscal policy and monetary policy are used to streamline the business cycle. This paper has examined the cyclical behavior of these variables over the business cycle of Bangladesh. The objective of this examination is to show whether policies (fiscal policy and monetary policy) in Bangladesh are taken with a motive to stabilize the economy or only to promote economic growth. In other words, it has examined whether the policies in Bangladesh are procyclical or countercyclical or acyclical. Hodrick Prescott (HP) filter has been used to separate the cyclical component of considered variables. Both correlation and regression-based analysis have provided that in Bangladesh government expenditure and interest rates behave procyclically, but money supply behaves acyclically over the business cycle. Besides, this paper has tried to identify the long-term as well as the short-term relationship between real GDP and the macroeconomic policy variables with the help of the Johansen cointegration test, vector error correction model (VECM), and block exogeneity Wald test. Through these analyses, this study has found that fiscal policy has a significant impact on GDP growth both in the short-run and long-run. In the case of monetary policy, although the interest rate has an impact on real output both in the short-run and long-run, the money supply has neither a short-run nor long-run effect on output growth.

Tunisian Fiscal Policy Effects in a New Keynesian Model With Price Rigidity and Monopolistic Competition

2021 ◽  
Vol 10 (1) ◽  
pp. 13-31
Author(s):  
Slah Slimani
Keyword(s):  
Fiscal Policy ◽  
Interest Rate ◽  
Private Consumption ◽  
Monopolistic Competition ◽  
Aggregate Demand ◽  
Public Spending ◽  
New Keynesian ◽  
Keynesian Model ◽  
The Business Cycle ◽  
The Interest Rate

This paper applies a multivariate neo-Keynesian DSGE model to study the effects of changes in Tunisian public spending on the business cycle, private consumption, wages, interest rate, and inflation rate in the presence of monopolistic competition and price nominal short-term rigidity. The main finding of this paper shows a Tunisian pro-cyclical fiscal policy. Expansionary public spending has two initial effects. The output increases due to the usual increase in labor supply, and aggregate demand increases due to an incomplete crowding out of private consumption. By increasing aggregate demand, the central bank increases the nominal interest rate, which moves in concert with inflation in order to counteract inflationary pressures. Households reduce their consumer spending at the same time as the real interest rate increases. Some companies are responding to the change in the interest rate by reducing their expenses, their employment demands, and their capital utilization rates.

Italy’s Economic Policy in the Age of the Euro

1999 ◽  
Vol 17 (2) ◽  
pp. 167-189
Author(s):  
Salvatore Zecchini
Keyword(s):  
Monetary Policy ◽  
Economic Policy ◽  
Fiscal Policy ◽  
Business Cycle ◽  
Adjustment Costs ◽  
Full Spectrum ◽  
Social Resistance ◽  
Critical Issues ◽  
The Business Cycle

Abstract Italy’s participation in the EMU entails majors shifts in its economic policy approach, involving the full spectrum of policy domains, and not just the monetary area alone. The author presents an overview of the main changes, highlighting a number of critical issues that have emerged. Italy’s need for higher growth over the business cycle can hardly be met through a unified monetary policy that is attuned to the requirements of the larger and more developed part of the Eurozone. Extensive constraints stemming from EMU on fiscal policy and other adjustment tools leave die country no choice but to press ahead with far-reaching reforms of its structures and markets. But progress in this direction is hampered by social resistance and inadequate mechanisms to ease adjustment costs. Under these conditions, the partial policy co-ordination stemming from EMU raises for Italy problems of sustainability over the longer term, especially in prolonged phases of stagnation or recession.

Fiscal Multipliers and Their Relevance in a Currency Union – A Survey

2014 ◽  
Vol 15 (2) ◽  
pp. 259-271 ◽  
Author(s):  
Gerhard Illing ◽  
Sebastian Watzka
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Business Cycle ◽  
Government Spending ◽  
Currency Union ◽  
Euro Crisis ◽  
Fiscal Multipliers ◽  
Role Of The State ◽  
The Business Cycle

Abstract The article reviews the debate on government spending multiplier and provides a detailed discussion of the underlying economic mechanisms, focusing on the role of the state of the business cycle and the monetary policy reaction. Special emphasis is on the effects of fiscal policy within a currency union and its implications for the euro crisis.

scholarly journals ANALISIS PASAR BARANG DAN PASAR UANG DI INDONESIA : PENDEKATAN KEBIJAKAN FISKAL DAN KEBIJAKAN MONETER

2018 ◽  
Vol 7 (2) ◽  
pp. 121
Author(s):  
Siska Rahmi ◽  
Ali Anis ◽  
Dewi Zaini Putri
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Interest Rate ◽  
Least Square ◽  
Fiscal Multiplier ◽  
Ordinary Least Square ◽  
Effective Policy ◽  
The Interest Rate ◽  
Equilibrium Market ◽  
Research Show

This study aims to analyze the (1) multiplier of fiscal policy and monetary policy, (2) equilibrium market of goods and money market in Indonesia, (3) effective policy to stabilize Indonesian economy by using Ordinary Least Square (OLS) method. The results of the research show that (1) a fiscal multiplier is 0.06 and a monetary multiplier is 1.17, (2) the equilibrium is at the interest rate of 1,81% and the GDP of Rp. 935.235,6 billion, and (3) the effective policy is monetary policy in stabilizing the economy.

scholarly journals Pushing on a String: US Monetary Policy Is Less Powerful in Recessions

2016 ◽  
Vol 8 (4) ◽  
pp. 43-74 ◽  
Author(s):  
Silvana Tenreyro ◽  
Gregory Thwaites
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Business Cycle ◽  
Resource Utilization ◽  
Monetary Policy Shocks ◽  
Business Investment ◽  
Us Economy ◽  
The Us ◽  
Policy Shocks ◽  
The Business Cycle

We investigate how the response of the US economy to monetary policy shocks depends on the state of the business cycle. The effects of monetary policy are less powerful in recessions, especially for durables expenditure and business investment. The asymmetry relates to how fast the economy is growing, rather than to the level of resource utilization. There is some evidence that fiscal policy has counteracted monetary policy in recessions but reinforced it in booms. We also find evidence that contractionary policy shocks are more powerful than expansionary shocks, but contractionary shocks have not been more common in booms. So this asymmetry cannot explain our main finding. (JEL E21, E22, E32, E52)

scholarly journals Cyclical Fluctuation, Growth, and Stabilization: An Empirical Investigation of Dual Policy Objectives in Bangladesh

2020 ◽  
Vol 3 (4) ◽  
Author(s):  
Sakil Ahmmed ◽  
◽  
Jonaed Jonaed
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Business Cycle ◽  
Interest Rates ◽  
Money Supply ◽  
Macroeconomic Policy ◽  
Output Growth ◽  
Long Run ◽  
Short Run ◽  
The Business Cycle

In conventional economics, two types of macroeconomic policy i.e. fiscal policy and monetary policy are used to streamline the business cycle. This paper has examined the cyclical behavior of these variables over the business cycle of Bangladesh. The objective of this examination is to show whether policies (fiscal policy and monetary policy) in Bangladesh are taken with a motive to stabilize the economy or only to promote economic growth. In other words, it has examined whether the policies in Bangladesh are procyclical or countercyclical or acyclical. Hodrick Prescott (HP) filter has been used to separate the cyclical component of considered variables. Both correlation and regression-based analysis have provided that in Bangladesh government expenditure and interest rates behave procyclically, but money supply behaves acyclically over the business cycle. Besides, this paper has tried to identify the long-term as well as the short-term relationship between real GDP and the macroeconomic policy variables with the help of the Johansen cointegration test, vector error correction model (VECM), and block exogeneity Wald test. Through these analyses, this study has found that fiscal policy has a significant impact on GDP growth both in the short-run and long-run. In the case of monetary policy, although the interest rate has an impact on real output both in the short-run and long-run, the money supply has neither a short-run nor long-run effect on output growth.

scholarly journals Negative Inflation Targeting: A Proposal of a Non-Distortionary Monetary Policy

2019 ◽  
Vol 22 (3) ◽  
pp. 336-356 ◽  
Author(s):  
Tomáš Frömmel
Keyword(s):  
Monetary Policy ◽  
Business Cycle ◽  
Inflation Targeting ◽  
Business Cycle Theory ◽  
Inflation Target ◽  
Policy Objective ◽  
Austrian Business Cycle Theory ◽  
Austrian Business Cycle ◽  
Growing Economy ◽  
The Business Cycle

This paper aims to propose a non-distortionary monetary policy objective consistent with the Austrian business cycle theory. Since the price level should fall in the growing economy in the Hayekian framework, introduction of a negative inflation target combined with the Taylor rule is suggested as a non-distortionary monetary policy. To keep the money stream stable, the optimal inflation target would be equal to the opposite of the growth rate of the economy. Such policy should lead to the smoothing of the business cycle path since monetary policy could be less activist compared to the current state of the positive inflation target. Possible criticisms of this suggestion are anticipated and addressed in this paper.

scholarly journals Cykl koniunkturalny w rolnictwie z perspektywy austriackiej szkoły ekonomii

2015 ◽  
pp. 111-121
Author(s):  
Jacek Maśniak
Keyword(s):  
Monetary Policy ◽  
Business Cycle ◽  
Growth Phase ◽  
Food Production ◽  
Production Structure ◽  
Business Cycle Theory ◽  
Austrian Business Cycle Theory ◽  
Austrian Business Cycle ◽  
The Business Cycle ◽  
Polish Economy

The aim of the article is to present the business cycle in Polish agriculture from the Austrian school of economics perspective. According to the Austrian business cycle theory, the main cause of business cycle is an expansionary monetary policy. It leads to lengthening the production structure in the growth phase. The largest growth is observed in sectors situated far away from the consumer. However, in the recession phase these sectors face the biggest downswings. The agriculture is relatively prone to fluctuations of production. A study carried out for the Polish economy in years 1999–2013 showed that the fluctuations of global and final agriculture output was larger than the food production, but smaller than the industry production.

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