scholarly journals Fiscal stimuli and consolidation in emerging market economies

2018 ◽  
Vol 15 (4) ◽  
pp. 113-122 ◽  
Author(s):  
Igor Chugunov ◽  
Mykola Pasichnyi
Keyword(s):  
Fiscal Policy ◽  
Public Debt ◽  
Policy Design ◽  
Emerging Market ◽  
Policy Formulation ◽  
Emerging Market Economies ◽  
Fiscal Consolidation ◽  
Market Economies ◽  
Medium Level ◽  
The Government

The Great Recession has imposed vital limitations on the policy maker’s ability to react to further economic challenges. In this article, the authors set a purpose to assess the expediency and the size of fiscal consolidation or expansionary measures for countries with emerging markets depending on economic dynamics. The data on the episodes of large changes in fiscal policy, representing both fiscal stimuli and consolidation in Ukraine and in the EU countries with emerging market economies from 2001 to 2017, were evaluated. The authors examined the main reasons of fiscal policy’s volatility and its impact on economic growth. The countries with low and medium level of institutional framework for fiscal policy formulation could face permanent deficit and public debt problem. Episodes of expansionary fiscal adjustments based on government revenues cuts and spending increases were more effective compared with those that were entirely based on spending increases. Empirical investigation showed that successful fiscal consolidation measures obligatory included the government primary spending reduction. In those cases, the budget deficit-to-GDP and public debt-to-GDP ratios were declined. Medium-term priorities to develop the methodical bases of fiscal policy design were justified.

The impacts of income inequality on the gross domestic product under direct taxation: evidence from emerging market economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ahmet Eren Yıldırım ◽  
Mete Dibo
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Income Inequality ◽  
Gross Domestic Product ◽  
Emerging Market ◽  
Domestic Product ◽  
Emerging Market Economies ◽  
Content Type ◽  
Market Economies ◽  
Direct Taxation

PurposeThis study analyzes the impacts of income inequality after direct taxation on the gross domestic product as a fiscal policy tool in the development process.Design/methodology/approachThe model of the study is based on Munielo-Gallo and Roca-Sagales (2013), which examined the fiscal policy, income inequality and economic growth simultaneously. The study uses two models to analyze the relationship between income inequality and gross domestic production under direct taxation by employing autoregressive distributed lag (ARDL) model for selected emerging market economies.FindingEmpirical results reveal a negative long-run relationship between variables in some countries in line with the literature, despite a positive relationship in others. Moreover, the results exhibit the negative impact of income inequality after direct taxation on the gross domestic product decreases.Originality/valueResults of the study highlight the importance of direct taxation on income inequality concerning the reflects on economic growth. It suggests that when the income distribution is fairer, it may positively affect the gross domestic product. The study provides a new perspective to the related literature by investigating the role of income inequality under direct taxation for gross domestic product.

scholarly journals TAX POLICY IN OECD COUNTIES

2018 ◽  
pp. 127-138
Author(s):  
Mykola PASICHNYI
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Tax Policy ◽  
Emerging Market ◽  
Oecd Countries ◽  
Emerging Market Economies ◽  
Tax Structure ◽  
Market Economies ◽  
Favorable Conditions

Introduction. Globalization intensifies the necessity for intergovernmental cooperation aiming to implement the measures on the tax and customs regulation. Considering both the economic cyclicality and historical retrospective, it is expedient to study the advanced and emerging market economies’ experience in the field of developing and implementing a set of fiscal policy measures during the economic expansion, recession, stagnation, and post-crisis recovery periods. The purposeis to systemize the experience of the government tax policy preparation and implementation in the OECD countries in the long-term retrospective, and to assess the tax structure and the level of taxation impact on economic growth. Results. Based on methods of economic regression to evaluate the fiscal policy in the OECD countries over 1981–2016 period, it was determined that increase in the tax burden did not provoke any significant destructive effect on the economy. At the same time, in the context of the tax structure, the taxes on capital had a negative impact on the real GDP growth rates, the taxes on labor had a lower degree of influence, and the effect of the taxes on consumption was almost neutral. The main measures of the tax regulation aimed to create the most favorable conditions for a long-term economic growth were investigated. The tax revenues structure’s complex analysis was carried out; the main tendencies of taxation were generalized. Conclusion. Tax policy is as an adaptive mechanism allowing to regulate the country’s economic development. The OECD countries consistently implement the systematic measures to reduce the income tax rate. This practice is caused by the need to create the most favorable conditions for the entrepreneurship development. Regarding the universal consumption taxes, a gradual rise in their rates was recorded. That fact is reflected by an increase in these taxes’ fiscal importance (taking into account the neutrality of their impact on the economic agents’ business activity). The transformation in the import operations’ model of taxation as well as the implementation and active intensification of free trade policies led to a reduction in the specific weight of customs duties. In modern conditions, the tax legislation’s unification as well as the strengthening of the supranational tax regulation’s role outline an important trend in the development of taxation systems both in advanced and emerging market economies.

IMF POLICY ADVICE TO EMERGING MARKET ECONOMIES DURING THE 2008–2009 CRISIS: NEW FUND OR NEW FUNDAMENTALS?

2011 ◽  
Vol 02 (01) ◽  
pp. 1-17 ◽  
Author(s):  
ATISH R. GHOSH ◽  
CHRISTOPHER CROWE ◽  
JUN IL KIM ◽  
JONATHAN D. OSTRY ◽  
MARCOS CHAMON
Keyword(s):  
International Monetary Fund ◽  
Emerging Market ◽  
Policy Advice ◽  
Emerging Market Economies ◽  
Fiscal Policies ◽  
Fiscal Consolidation ◽  
Market Economies ◽  
Advanced Economies ◽  
The Impact ◽  
The International Monetary Fund

This paper reviews the International Monetary Fund (IMF) policy advice to emerging market economies (EMEs) during the 2008-09 crisis, contrasting it to previous crisis episodes. EMEs that had strong fundamentals, and were mainly affected through international trade and financial spillovers, were advised to loosen monetary and fiscal policies, much like the counter-cyclical policies pursued by advanced economies. But in EMEs with "home-grown" vulnerabilities, the advice was more traditional fiscal consolidation, monetary restraint and structural reform, albeit with more financing and greater emphasis on cushioning the impact of the shock. Thus, the "new" IMF advice was the result of "new fundamentals" in EMEs.

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.

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