scholarly journals Impact of Fiscal Rules on Level of Economic Growth in Monetary Unions

2020 ◽  
Vol 68 (6) ◽  
pp. 695-724
Author(s):  
Matej Boór
Keyword(s):  
Economic Growth ◽  
Fiscal Rules ◽  
Monetary Unions

Analysis of tax-spend nexus for Russian regional budgets

2020 ◽  
pp. 5-29
Author(s):  
Evsey T. Gurvich ◽  
Natalia A. Krasnopeeva
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Causal Relationship ◽  
National Economy ◽  
Federal Budget ◽  
Fiscal Rules ◽  
Fiscal Discipline ◽  
Federal Level ◽  
Regional Budgets ◽  
Econometric Technique

We study the tax-spend nexus for Russian regional budgets. Causal relationship running from taxing to spending is found, thus supporting the concept “tax and spend” suggested by M. Friedman. Next, elasticity of expenditure by revenue is estimated for a panel of 80 regional budgets basing on data for 2000—2017. Estimates are in the range of 0.72 to 0.78 (depending on the econometric technique), which exceeds elasticity for the federal budget more than twice. This evidences that fiscal policy at the sub-federal (as distinct from the federal) level has clear pro-cyclical nature. Besides, the largest sensitivity of expenditure to revenue shocks is found for the item “national economy”, implying marked adverse implications for economic growth. We suggest to mitigate this effect by modifying fiscal rules for sub-federal budgets. They are currently aimed primarily at enhancing fiscal discipline, with less emphasis on countercyclical policy, insulating economy from fiscal shocks.

EUROPEAN FISCAL RULES AS A LIABILITY IN THE TRANSATLANTIC TRADE CONFLICT: LESSONS FROM NiGEM SIMULATIONS

2020 ◽  
Vol 254 ◽  
pp. R54-R66 ◽  
Author(s):  
Sebastian Dullien ◽  
Sabine Stephan ◽  
Thomas Theobald
Keyword(s):  
Economic Growth ◽  
European Union ◽  
Fiscal Policy ◽  
Fiscal Rules ◽  
The European Union ◽  
Negative Effects ◽  
Transatlantic Trade ◽  
The Us ◽  
Trump Administration

Under the Trump administration, a transatlantic trade conflict has been escalating step by step. First, it was about tariffs on steel and aluminium, then about retaliation for the French digital tax, which is suspended until the end of the year. Most recently, the US administration threatened the European Union with tariffs on cars and car parts because of Canadian seafood being subject to lower import duties. As simulations with NiGEM show, a further escalation of the transatlantic trade conflict has the potential to slow down economic growth significantly in the countries involved. This is a considerable risk given the fact that the countries have to cope with the enormous negative effects of the pandemic shock. Furthermore, the damage caused by the trade conflict depends on the extent to which the affected countries use fiscal policy to stabilise their economies.

UNIQUELY SINGAPORE'S BUDGETARY SYSTEM AND SOCIAL PROTECTION FINANCING SCHEMES

2014 ◽  
Vol 59 (03) ◽  
pp. 1450024 ◽  
Author(s):  
NGEE CHOON CHIA
Keyword(s):  
Economic Growth ◽  
Economic History ◽  
Social Protection ◽  
Fiscal Sustainability ◽  
Fiscal Rules ◽  
Budgetary Process ◽  
Demographic Dividend ◽  
Welfare Programs ◽  
Fiscal Discipline ◽  
Financing Schemes

This paper examines Singapore's fiscal position and its unique way of financing targeted welfare programs. We examine how reserves are accumulated through fiscal discipline during times of phenomenal economic growth in Singapore and when Singapore was enjoying demographic dividend. The existence of the large accumulated reserves has resulted in particular features of the Singapore's budgetary process, such as fiscal rules, which govern the utilization of revenues from the reserves. Innovative budget implementation, such as Block Budgeting, has helped Singapore to ensure fiscal sustainability. The accumulation of reserves throughout its economic history has afforded Singapore a unique way to fund social protection through special transfers and funds, without having to raise taxes.

scholarly journals Economic Zones as Key Players in Economic Advancement: the Bangladesh Perspective

2019 ◽  
Vol 27 (1) ◽  
Author(s):  
Mustafizur Rahman ◽  
Muhammad Abu Yusuf
Keyword(s):  
Economic Growth ◽  
World Bank ◽  
Fiscal Rules ◽  
The World Bank ◽  
The World ◽  
Role Players ◽  
One Stop ◽  
Skilled Workforce ◽  
Economic Zones ◽  
Double Digit

Bangladesh is one of the top five growing economies in the world, according to the World Bank. The country is now at a critical economic juncture with many challenges ahead. The double-digit growth rate of Gross Domestic Product, a massive influx of investment and a highly skilled workforce is the key bases to secure ‘Vision 2041’. This study shows how the Economic Zones are contributing to foster economic development in Bangladesh. The background study of the Economic Zones showed that the ‘Bangladesh Economic Zones Authority Act, 2010’ was enacted to make each zone an engine for economic growth. Describing the challenges, the study shows the key dynamic aspects of Economic Zones and the rationale behind why investors and other people are marking them as key role players in the economic advancements of Bangladesh. Economic Zones are contributing to attracting Foreign Direct Investment, local investment and employment to promote the economic growth of the country. The priorities of the investors were sorted out, and some gaps were also detected. Upgrading online servicing in fostering ‘One Stop Service’ and revisiting fiscal rules are the suggestions more from this study.

scholarly journals The Synchronization of Financial and Business Cycles in Saudi Arabia

2018 ◽  
Vol 5 (4) ◽  
pp. 32 ◽  
Author(s):  
Osama El-Baz
Keyword(s):  
Economic Growth ◽  
Saudi Arabia ◽  
Fiscal Policy ◽  
Business Cycles ◽  
Early Warning Systems ◽  
Fiscal Rules ◽  
Economic Stability ◽  
Systemic Risks ◽  
Financial Credit ◽  
Financial Cycles

Financial cycles have become vividly tracked and analyzed by regulatory authorities to avoid the buildup of excessive systemic risks in the financial system that could hamper economic growth. However, fiscal policy usually pays an exclusive attention to business cycles; which might leave fiscal outcomes vulnerable to financial sector dynamics. We investigated financial and business cycles in Saudi Arabia over the period (1970Q1- 2016Q4). The results of the BBQ cycle dating algorithm revealed that the duration of financial upturns (downturns) are longer than that for economic expansions (contractions) in means, also both the amplitude and the slope for upturns (downturns) are higher than those for expansions (contractions) in means. Moreover, financial cycle episodes are more frequent than business cycle episodes. Finally, we found empirical evidence that financial (credit) conditions are crucial for economic stability. Fiscal policy can play an important role in fostering economic growth going forward through the implementation of a countercyclical policy that allows for the accumulation of fiscal buffers and releasing them during periods of an economic slowdown, the setup of early warning systems for business and financial cycles, and the introduction of fiscal rules to limit the scope for a procyclical fiscal stance.

scholarly journals Fiscal Rules: Anchors of Stability

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Niklas Potrafke ◽  
Christoph A. Schaltegger
Keyword(s):  
Economic Growth ◽  
Fiscal Rules ◽  
Fiscal Deficits ◽  
Fiscal Manipulation

Abstract We believe that fiscal rules help to consolidate budgets in the post-Corona period. Fiscal rules reduce fiscal deficits and debt-to-GDP ratios, promote economic growth, mitigate room for fiscal manipulation and encourage politicians to prioritize individual policies.

Scenarios for European growth are narrow

2019 ◽  
Keyword(s):  
Economic Growth ◽  
Downward Trend ◽  
Fiscal Rules ◽  
Fiscal Stimulus ◽  
Content Type ◽  
European Economic ◽  
Political Backlash ◽  
Economic Outlook ◽  
The Eu ◽  
Stimulus Package

Subject European economic outlook. Significance European economic growth is set to continue on a downward trend and might turn negative. Despite the need for substantial macroeconomic expansion, it is difficult to envision a scenario in which it can be engineered within Europe, while pressures outside the EU will make the economic environment more fragile. Impacts Only a recession in Germany which triggers a strong political backlash could see Berlin implement a significant fiscal stimulus package. While Europe’s dependency on Saudi oil is low, a prolonged decline in production would add to pressure on its economy. Italy’s new government will respect EU fiscal rules and reduce concerns that Italy could leave the euro.

scholarly journals Fiscal performance in monetary unions: How much austerity should be allowed?

2017 ◽  
Vol 64 (1) ◽  
pp. 61-76 ◽  
Author(s):  
Carmen Díaz-Roldán
Keyword(s):  
Fiscal Policy ◽  
Central Bank ◽  
Sovereign Debt ◽  
Initial Level ◽  
Debt Crisis ◽  
Fiscal Rules ◽  
Fiscal Policies ◽  
Fiscal Consolidation ◽  
Monetary Unions ◽  
Fiscal Discipline

The effectiveness of fiscal policy becomes particularly relevant in the case of the member countries of a monetary union facing a sovereign debt crisis. In that environment, fiscal policy is constrained by the need to carry out fiscal consolidation and reduce debt levels. For that reason and with the purpose of anchoring fiscal discipline, the adoption of fiscal rules has become a central issue. In this paper we will analyse the management of fiscal policies in monetary unions, when the central bank and the fiscal authorities follow policy rules. The results are related to the conservativeness of the central bank, the degree of austerity of the fiscal authorities and the initial level of public debt.

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