scholarly journals The Impact of the Great Recession on Monetary and Fiscal Policy in Developed Market Economies

2015 ◽  
Vol 6 (1) ◽  
pp. 56-71 ◽  
Author(s):  
Damir Šehović
Keyword(s):  
Fiscal Policy ◽  
Great Recession ◽  
Fiscal Policies ◽  
Market Economies ◽  
The Great Recession ◽  
The Great Depression ◽  
Theoretical Assumptions ◽  
Monetary And Fiscal Policy ◽  
The Impact

Abstract Background: With the occurrence of the crisis in 2007, which caused the largest economic contraction since the Great Depression in the thirties, it has become evident that the previous understanding of strategies, effects and roles of monetary and fiscal policy should be redefined. Objectives: The aim of this paper is to illustrate a possible expected change in monetary and fiscal policy in developed market economies that could occur as a consequence of the Great Recession. Methods/Approach: The paper provides a comparative analysis of various primary economic variables related to the developed OECD countries, as well as the empirical testing of the selected theoretical assumptions. Results: The changes in monetary policy refer to the question of raising target inflation, considering a possible use of aggregate price level targeting and paying attention to the role of central banks in suppressing the formation of an asset bubble. The success of fiscal policy in attaining stabilization depends on the size of possible fiscal measures and creation of automatic stabilizers. Conclusions: For the most part, monetary and fiscal policies will still stay unchanged, although some segments of these policies need to be improved.

scholarly journals Activist Fiscal Policy

2010 ◽  
Vol 24 (4) ◽  
pp. 141-164 ◽  
Author(s):  
Alan J Auerbach ◽  
William G Gale ◽  
Benjamin H Harris
Keyword(s):  
Fiscal Policy ◽  
Interest Rates ◽  
Great Recession ◽  
Economic Conditions ◽  
Fiscal Policies ◽  
The Great Recession ◽  
Policy Interventions ◽  
Low Interest Rates ◽  
The Many ◽  
Monetary And Fiscal Policy

During and after the “Great Recession” that began in December 2007 the U.S. federal government enacted several rounds of activist fiscal policy. In this paper, we review the recent evolution of thinking and evidence regarding the effectiveness of activist fiscal policy. Although fiscal interventions aimed at stimulating and stabilizing the economy have returned to common use, their efficacy remains controversial. We review the debate about the traditional types of fiscal policy interventions, such as broad-based tax cuts and spending increases, as well as more targeted policies. While there have been improvements in estimates of the effects of broad-based policies, much of what has been learned recently concerns how such multipliers might vary with respect to economic conditions, such as the credit market disruptions and very low interest rates that were central features of the Great Recession. The eclectic and innovative interventions by the Federal Reserve and other central banks during this period highlight the imprecise divisions between monetary and fiscal policy and the many channels through which fiscal policies can be implemented.

scholarly journals Demand effects of fiscal policy since 2008

2019 ◽  
Vol 7 (1) ◽  
pp. 57-74 ◽  
Author(s):  
Engelbert Stockhammer ◽  
Walid Qazizada ◽  
Sebastian Gechert
Keyword(s):  
Fiscal Policy ◽  
Fiscal Policies ◽  
Fiscal Multipliers ◽  
The Great Recession ◽  
The Usa ◽  
Demand Effects ◽  
The Uk ◽  
Open Question ◽  
The Impact

The Great Recession of 2007–2009 has led to controversies about the role of fiscal policy. Academically this has translated into renewed interest in the effects of fiscal policy. Several studies have since suggested that fiscal multipliers are substantially larger in downswings or depressions than in upswings. In terms of economic policy reactions, countries have differed substantially in their fiscal stance. It is an important open question how big the impact of these policies on economic growth has been. The paper uses the regime-dependent multiplier estimates by Qazizada and Stockhammer (2015) and by Gechert and Rannenberg (2014) to calculate the demand effects of fiscal policy for Germany, the USA, the UK, Greece, Ireland, Italy, Portugal and Spain since 2008. This allows us to assess to what extent fiscal policy explains different economic performances across countries. We find expansionary fiscal policy in 2008–2009 in all countries, but since 2010 fiscal policies have differed. While the fiscal effect was roughly neutral in Germany, the UK and the USA, it was large and negative in Greece, Ireland, Italy, Portugal and Spain.

scholarly journals Inspecting the Mechanism: Leverage and the Great Recession in the Eurozone

2017 ◽  
Vol 107 (7) ◽  
pp. 1904-1937 ◽  
Author(s):  
Philippe Martin ◽  
Thomas Philippon
Keyword(s):  
Market Segmentation ◽  
Great Recession ◽  
Fiscal Policies ◽  
Labor Costs ◽  
The Great Recession ◽  
Credit Cycles ◽  
Macroprudential Policies ◽  
Fiscal Austerity ◽  
The Impact ◽  
Identification Strategy

We provide a comprehensive account of the dynamics of eurozone countries from 2000 to 2012. We analyze private leverage, fiscal policy, labor costs, and spreads, and we propose a model and an identification strategy to separate the impact of credit cycles, excessive government spending, and sudden stops. We then ask how periphery countries would have fared with different policies. We find that countries could have stabilized their employment if they had followed more conservative fiscal policies during the boom. Macroprudential policies and an early intervention by the central bank to prevent market segmentation and reduce fiscal austerity would also have significantly reduced the recession. (JEL E24, E32, E58, E62, F33, F42, H61)

scholarly journals Growing discoordination between monetary and fiscal policies in Ukraine

2019 ◽  
Vol 14 (2) ◽  
pp. 40-49 ◽  
Author(s):  
Svitlana Mishchenko ◽  
Svitlana Naumenkova ◽  
Volodymyr Mishchenko ◽  
Viktor Ivanov ◽  
Roman Lysenko
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Interest Rate ◽  
Weighted Average ◽  
Fiscal Policies ◽  
Macroeconomic Indicators ◽  
High Volatility ◽  
Monetary And Fiscal Policy ◽  
Sustainable Economic Growth ◽  
The Impact

The slowdown in economic development caused by the reduction in the efficiency of the functioning of state institutions determined the focus of the governments of most countries of the world on achieving sustainable economic growth, as well as ensuring macroeconomic and macrofinancial stability. A major issue that is dealt with is the weakening of the interaction of monetary and fiscal policies in Ukraine. It can be assumed that one of the reasons hindering economic growth is growing discoordination between monetary and fiscal policies. The purpose of this study is to assess the nature of monetary and fiscal policies in Ukraine in 2000–2017 and justify the need for coordination between them to stimulate economic growth. For the quantitative assessment of the influence of monetary and fiscal factors on GDP, the models of autoregression with distributed lags – ARDL are used. The analysis makes it possible to distinguish and characterize three stages of combining the rigid and stimulating monetary and fiscal policy in Ukraine in 2000–2017. The article examines the influence of the dynamics of the monetary aggregate M3, the inflation rate and the weighted average base interest rate on the growth rates of real GDP in Ukraine, the impact of using the “monetary clamp” effect on the increase in the NBU’s interest rate, and the direct effect of monetary factors on the fiscal policy. The authors conclude that the inconsistency of monetary and fiscal policies is one of the reasons for the high volatility of macroeconomic indicators. The article substantiates the conclusion that it is necessary to overcome the increasing antagonism between monetary and fiscal policies in Ukraine and to strengthen their coordination.

scholarly journals Empirical study of the fiscal policy impact on economic growth

2017 ◽  
Vol 15 (3) ◽  
pp. 316-322 ◽  
Author(s):  
Mykola Pasichnyi
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Emerging Market ◽  
Positive Influence ◽  
Emerging Market Economies ◽  
Market Economies ◽  
Role Of The State ◽  
Budget Policy ◽  
The Impact

The challenges of economic globalization, recession, and the essential changes in market conditions, as well as the financial institutionalization, determine the expediency of the new studies to explore the impact of fiscal instruments on the dynamics of economic growth and social stability. This paper examines the role of fiscal policy in the economic growth ensuring in advanced and emerging market economies over the period from 2001 to 2015. The research indicates the growing role of the state (in general) and the budget (in particular) in regulation of social and economic processes. Based on the methods of economic regression, the interrelations between government spending and GDP growth in different groups of countries were evaluated. The study emphasized the directions to increase the positive influence of budget policy on economic development for countries with emerging market economies. This can be achieved by harmonization of the tax burden and structure, improving the use of budget funds, conducting structural optimization of budget expenditures, further development of financial and budget institutions, implementation of the fiscal constraints and rules while forming the basic indicators of fiscal policy.

scholarly journals Demand and growth regimes in finance-dominated capitalism and the role of the macroeconomic policy regime: a post-Keynesian comparative study on France, Germany, Italy and Spain before and after the Great Financial Crisis and the Great Recession

2021 ◽  
Author(s):  
Eckhard Hein ◽  
Judith Martschin
Keyword(s):  
Open Economy ◽  
Great Recession ◽  
Macroeconomic Policy ◽  
Fiscal Policies ◽  
Policy Regime ◽  
Policy Regimes ◽  
The Great Recession ◽  
Before And After ◽  
Big Four

AbstractWe contribute to the recent debates on demand and growth regimes in modern finance-dominated capitalism linking them to the post-Keynesian research on macroeconomic policy regimes. We examine the demand and growth regimes, as well as the macroeconomic policy regimes for the big four Eurozone countries, France, Germany, Italy and Spain, for the periods 2001–2009 and 2010–2019. First, our approach supports the usefulness of the identification of demand and growth regimes according to growth contributions of the main demand components and financial balances of the macroeconomic sectors. This allows for an understanding of the demand sources of growth, or stagnation, if there is a lack of demand, of how these sources are financed and of potential financial instabilities and fragilities. Second, when it comes to the macroeconomic policy drivers of demand and growth regimes, as well as their respective changes, we show that the exclusive focus on fiscal policies, as in the previous literature, is too limited and that it is the macroeconomic policy regime which matters here, i.e. the combination of monetary, fiscal and wage policies, as well as the open economy conditions.

Economic crisis, social networks, and political preferences

2020 ◽  
Author(s):  
Lisha Liu ◽  
Alexander Kuo ◽  
Jose Fernandez-Albertos
Keyword(s):  
Social Networks ◽  
Great Recession ◽  
Status Quo ◽  
New Parties ◽  
The Great Recession ◽  
Political Preferences ◽  
The Impact ◽  
Supranational Institutions ◽  
Additional Channel

Abstract How did the great recession affect policy and partisan preferences in the most afflicted countries? We theorize the role of a previously under-emphasized source of preferences: the size and scope of one’s exposure to other individuals who have been exposed to the crisis. Contact with others who have economically suffered should be an additional channel for the crisis’ effects on policy preferences. We gathered data during the recession from a crisis-hit country, Spain, to measure the size of the respondent’s social networks in different ways and the impact of the crisis upon them. We also measured a battery of policy and political preferences (support for austerity, the euro, supranational institutions and new parties). We find strong associations between support for anti-status quo policies and anti-establishment parties and exposure to economic suffering within one’s social networks in ways that enrich our understanding of the process of preference formation in times of crisis.

Resisting the Great Recession: Social movement unionism in Croatia and Serbia

2021 ◽  
pp. 095968012110232
Author(s):  
Danijela Dolenec ◽  
Daniela Širinić ◽  
Ana Balković
Keyword(s):  
Social Movement ◽  
Great Recession ◽  
Paired Comparison ◽  
Varieties Of Capitalism ◽  
Event Data ◽  
Social Movement Unionism ◽  
The Great Recession ◽  
Policy Strategies ◽  
The Impact

Addressing the debate regarding the impact of the Great Recession on changing union strategies in post-socialist Europe, our analysis shows that in Croatia and Serbia the crisis, while depressing strike numbers, was nevertheless met with substantial union resistance. Developing a paired comparison and relying on protest event data for the period 2000–2017, we argue that the differences among the two countries’ respective varieties of capitalism drive divergent union strategies described as social movement unionism. In Serbia, the role of unions in protests articulating workers’ demands remained more central and unions were overall more present in the protest arena, while in Croatia, unions have exhibited stronger propensity to forge alliances and adopt innovative policy strategies. While taking on board scholarship that portrays social movement unionism as signalling union weakness, we argue that strategies which increase union mobilization capacity may also be understood as increasing union resilience in changing social circumstances.

scholarly journals The impact of fiscal policies on corruption: A panel analysis

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Monica V. Achim ◽  
Sorin N. Borlea ◽  
Andrei M. Anghelina
Keyword(s):  
Developing Countries ◽  
Fiscal Policy ◽  
Developed Countries ◽  
Fiscal Policies ◽  
Panel Analysis ◽  
Policy Makers ◽  
The Right ◽  
Fiscal Pressure ◽  
The Impact

This article seeks to complement the previous literature and clarify whether fiscal policy plays a role in the level of corruption of a country. The present work investigates whether the increase in fiscal pressure leads to a higher level of corruption and whether the results differ from developed to developing countries. This article examines a large sample consisting of over 185 countries, during the period 2005–2014. The technique employed was short panel data. Five statistical models were used such as the pooled OLS, pooled FGLS, within model, between model and random-effects GLS model. Our main contribution consists in finding differentiated results of the influence of fiscal policy on the level of corruption among developed and developing countries. For developed countries, we found that, with high-quality institutions, low fiscal pressure leads to a lower level of corruption, which is in line with expectations. Conversely, in developing countries, with low-level institutional quality, low fiscal pressure increases corruption, because of low governance efficiency under which people may easily circumvent the law. Our findings suggest that governments and policy-makers need to acknowledge that the anti-corruption fight requires not only the right fiscal policies but also the right way of implementing these policies, recognising the role of quality institutions, which need to prevail in any country.

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