Empirical analysis of the fuzzy system model of financial expenditure economic effect

2021 ◽  
pp. 1-12
Author(s):  
Liangguo Qiao ◽  
Mingde Qi
Keyword(s):  
Fiscal Policy ◽  
Economic Effect ◽  
Policy Instruments ◽  
Economic Effects ◽  
Government Investment ◽  
Short Run ◽  
Dynamic Stochastic ◽  
Investment Spending ◽  
The Impact

In order to analyze the effects of active fiscal policy implemented in China in the context of tax and fee reduction, this paper adopts a dynamic stochastic general equilibrium model with microeconomic foundations to study the economic effects of fiscal policy based on a comprehensive consideration of the previous literature. The empirical study based on Matlab software finds that: first, active fiscal policy has a boosting effect on the economy and can stimulate the level of output to rise in the short run; second, different fiscal policy instruments have different impact mechanisms on economic variables, and the impact paths of government consumption spending and investment spending are completely inconsistent; third, the economic effects of government tax cut policies are better than government spending policies, and structural tax cut policy is softer than universal tax cuts; fourth, expansionary government investment spending has the most significant effect on output stimulation and has a very long-term impact on output level. Through the above model analysis, this paper argues that fiscal policy should play a greater role in supporting industrial restructuring, giving full play to the long-term advantages of the interest rate effect on the basis of satisfying society’s short-term needs and pursuing prosperous economic development, increasing investment in public resource areas, deepening industrial structural reforms, offsetting negative supply shocks brought by trade frictions and cross-border investment, raising long-term output levels and increasing employment opportunities.

scholarly journals The Effect of Government Consumption and Government Investment as Intervening Variables to Growth in Indonesia

2020 ◽  
Vol 20 (2) ◽  
pp. 193-207
Author(s):  
Suparjito Suparjito ◽  
Julianus Johnny Sarungu ◽  
Albertus Magnus Soesilo ◽  
Bhimo Rizky Samudro ◽  
Erni Ummi Hasanah
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Budget Deficit ◽  
Partial Least Square ◽  
Analysis Tool ◽  
Government Investment ◽  
Government Consumption ◽  
The Government ◽  
Investment Spending ◽  
The Impact

Fiscal policy and monetary policy are the two macroeconomic policies used by the government and monetary authorities in order to create a stable economy. The budget deficit policy is one form of fiscal policy implemented by the government in order to realize a high level of economic growth, a controlled inflation rate and open up new job opportunities to reduce unemployment. The impact of the implementation of the budget deficit policy on the level of economic growth is a long debate. Neoclassical groups argue that the implementation of budget deficit policies is detrimental to the economy, as it lowers the rate of economic growth. Keynesian groups argue that the implementation of the budget deficit policy is very good for the economy, because it triggers the rate of economic growth by increasing the number of demand for goods and services through increased government spending. While the Richardian people argue that the implementation of budget deficit policy has no effect on the economy. The data used in this study is data from 1981-2014 which consists of budget deficit, government consumption, government investment and economic growth rate. The method of analysis in this research is using Partial Least Square-Path Modeling (PLS-PM) approach with SMART-PLS analysis tool which aims to analyze the direct and indirect influence of the implementation of budget deficit policy toward the level of economic growth through government consumption and government investment. The results show that the implementation of the budget deficit policy can increase economic growth through increased government investment spending. Keywords: budget deficits, government investment, government consumption, growth.

Determinants of Inflation in Vietnam: A VECM Approach

2015 ◽  
Vol 22 (04) ◽  
pp. 26-50
Author(s):  
Ngoc Tran Thi Bich ◽  
Huong Pham Hoang Cam
Keyword(s):  
Interest Rate ◽  
Crude Oil ◽  
Error Correction ◽  
Budget Deficit ◽  
Oil Prices ◽  
Crude Oil Prices ◽  
Domestic Credit ◽  
Short Run ◽  
The Impact

This paper aims to examine the main determinants of inflation in Vietnam during the period from 2002Q1 to 2013Q2. The cointegration theory and the Vector Error Correction Model (VECM) approach are used to examine the impact of domestic credit, interest rate, budget deficit, and crude oil prices on inflation in both long and short terms. The results show that while there are long-term relations among inflation and the others, such factors as oil prices, domestic credit, and interest rate, in the short run, have no impact on fluctuations of inflation. Particularly, the budget deficit itself actually has a short-run impact, but its level is fundamentally weak. The cause of the current inflation is mainly due to public's expectations of the inflation in the last period. Although the error correction, from the long-run relationship, has affected inflation in the short run, the coefficient is small and insignificant. In other words, it means that the speed of the adjustment is very low or near zero. This also implies that once the relationship among inflation, domestic credit, interest rate, budget deficit, and crude oil prices deviate from the long-term trend, it will take the economy a lot of time to return to the equilibrium state.

Pension Reform in Russia: Assessing the Susceptibility of GDP Production to a Shift in the Number of the Working-Age Population

2019 ◽  
pp. 80-86
Author(s):  
T. P. Skufina ◽  
S. V. Baranov
Keyword(s):  
Pension Reform ◽  
Fixed Capital ◽  
Economic Effects ◽  
Pension Scheme ◽  
Retirement Age ◽  
Working Age ◽  
Working Age Population ◽  
Long Term Forecasting ◽  
The Impact

The presented study considers the susceptibility of gross domestic product (GDP) production to a shift in the number of the working-age population due to an increase in retirement age starting with 2019.Aim. The study aims to examine the quantitative assessments of GDP production in Russia with allowance for the changes in the number of the working-age population due to an increase in the actual retirement age.Tasks. The authors forecast the number of the working-age population with allowance for an increase in the retirement age; develop a model to establish a correlation between the number of the workingage population, investment in fixed capital, and GDP production; quantify the impact of the shift in the number of the working-age population on GDP production in Russia. Methods. This study is based on the results of modeling and long-term forecasting.Results. An economic-mathematical model to establish a correlation between the number of the working-age population, investment in fixed capital, and GDP production is presented. To specify the economic effects of a shift in the number of the working-age population due to an increase in the retirement age, Russia’s GDP production is forecasted for the “old” and “new” (increased retirement age) pension scheme. The forecast is provided for three variants of the number of the working-age population.Conclusions. It is found that with the “old” pension scheme with a lower retirement age GDP production across all three variants will decrease by 2036 compared to 2017. With regard to the “new” scheme that increases the retirement age, it is concluded that an increase in the retirement age is a factor that facilitates GDP production. However, its effect on economic growth will be insignificant.

Interactive effects between monetary policy and fiscal policy based on dynamic stochastic general equilibrium model

2020 ◽  
pp. 1-12
Author(s):  
Ying Xie
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
General Equilibrium ◽  
Equilibrium Model ◽  
Control Policy ◽  
Dynamic Stochastic General Equilibrium ◽  
Economic Effects ◽  
Interactive Effects ◽  
Supply Side ◽  
Dynamic Stochastic

From the beginning to the end, monetary policy has focused too much on the control of the supply side. At present, the single supply-based monetary policy is ineffective. Therefore, it is urgent to change the current single direct supply-side regulation and control policy and replace it with a non-single and indirect control policy that combines supply and demand. Based on machine learning algorithms, this paper constructs a monetary policy analysis model based on dynamic stochastic general equilibrium methods to analyze the interactive effects of monetary policy and other policies. Moreover, this paper uses the dynamic stochastic general equilibrium model to simulate and analyze the economic effects of fiscal policy. In addition, this paper compares the economic effects of monetary policy and other policies and conducts verification and analysis through actual data. The obtained results show that the model constructed in this paper achieves the expected effect.

Where Did All the Dollars Go? The Effect of Cash Flows on Capital and Asset Structure

2011 ◽  
Vol 46 (5) ◽  
pp. 1259-1294 ◽  
Author(s):  
Sudipto Dasgupta ◽  
Thomas H. Noe ◽  
Zhen Wang
Keyword(s):  
Cash Flow ◽  
Economic Effect ◽  
Balance Sheet ◽  
Cash Flows ◽  
Long Run ◽  
Goods Market ◽  
Short Run ◽  
Debt Market ◽  
Short And Long Term

AbstractThis paper documents the short- and long-term balance sheet effect of cash flows. We show that cash savings in the short run and debt reduction in both the short and the long run account for a substantial fraction of cash flow use. Although, in the long run, investment exhibits substantial sensitivity to cash flows, investment does not absorb the entire cash flow shock. In fact, the tighter the financial constraints, the smaller the fraction of cash flow absorbed by investment and the more by leverage reduction. Firms stage their response to increases in cash flow, delaying investment while building up cash stocks and reducing leverage. These results suggest that much of the short-run economic effect of cash flow shocks to the corporate sector may be channeled into the corporate debt market rather than the capital goods market, especially when financing constraints tighten.

Does Public Debt Service Expenditure Crowd-Out Economic Growth? Empirical Evidence from an African Developing Country

2019 ◽  
Vol 64 (3) ◽  
pp. 23-38
Author(s):  
Talknice Saungweme ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Time Series Data ◽  
Policy Formulation ◽  
Debt Service ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
The Impact

Abstract This paper contributes to the ongoing debate on the impact of public debt service on economic growth; and it provides an evidence-based approach to public policy formulation in Zimbabwe. The empirical analysis was performed by applying the autoregressive distributed lag (ARDL) technique to annual time-series data from 1970 to 2017. The study findings reveal that the impact of public debt service on economic growth in Zimbabwe is negative in the short run but positive in the long run. The results are suggestive of the existence of a crowding-out effect of public debt service in Zimbabwe in the short run and a crowding-in effect in the long run. In view of these findings, the government should consider fiscal and financial policies that promote a constant supply of long-term finance, long-term fixed investments, and extension of a government securities maturity structure so as to ensure sustainable short- and long-term public debt service expenditures. The study further recommends the strengthening of non-distortionary revenue mobilisation reforms to reduce market distortions and boost domestic investment.

What Explains Current Account Surplus in Korea?

2018 ◽  
Vol 17 (2) ◽  
pp. 70-93
Author(s):  
Chirok Han ◽  
Kwanho Shin
Keyword(s):  
Exchange Rate ◽  
Fiscal Policy ◽  
Current Account ◽  
Current Account Balance ◽  
Budget Deficits ◽  
Current Account Surplus ◽  
Short Run ◽  
The Right ◽  
The Impact ◽  
The Current Account

Since the currency crisis in 1998, Korea has experienced continuous current account surpluses. Recently, the current account surplus increased more rapidly—amounting to 7.7 percent of GDP in 2015. In this paper, we investigate the underlying reasons for the widening of Korea's current account surpluses. We find that the upward trend in Korea's current account surpluses is largely explained by its demographical changes. Other economic variables are only helpful when explaining short run fluctuations in current account balances. Moreover, we show that Korea's current account surplus is expected to disappear by 2042 as it becomes one of the most aged economies in the world. Demographic changes are so powerful that they explain, quite successfully, the current account balance trends of other economies with highly aged populations such as Japan, Germany, Italy, Finland, and Greece. When we add the real exchange rate as an additional explanatory variable, it is statistically significant with the right sign, but the magnitude explained by it is quite limited. For example, to reduce the current account surplus by 1 percentage point, a 12 percent depreciation is needed. If Korea's current exchange rate is undervalued 4 to 12 percent less than the level consistent with fundamentals, it is impossible to reduce Korea's current account surplus to a reasonable level by adjusting the exchange rate alone. Another way to reduce current account surplus is to expand fiscal policies. We find, however, that the impact of fiscal adjustments in reducing current account surplus is even more limited. According to our estimates, reducing the current account surplus by 1 percentage point requires an increase in budget deficits (as a ratio to GDP) of 5 to 6 percentage points. If we allow endogenous movements of exchange rate and fiscal policy, the impact of exchange rate adjustment increases by 1.6 times but that of fiscal policy decreases that it is no longer statistically significant.

scholarly journals The Impact of Exchange Rate on Bangladesh’s Export: A Cointegration Approach

2020 ◽  
pp. 22-30
Author(s):  
Takrima Sayeda
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange Market ◽  
Export Performance ◽  
Long Run ◽  
Time Period ◽  
Floating Exchange Rate ◽  
Short Run ◽  
Year 2000 ◽  
The Impact

The purpose of the paper is to see if there is any relationship exist between free floating exchange rate and export performance of Bangladesh. It inspects the monthly data of exchange rate and export value for the time period between year 2000 and 2017. It utilized the Johansen [1] cointegration approach to identify the extent of long run and short run relationship between them. The study could not establish neither any long term trend nor any short term dynamics between the variables. Respective variables are significantly related to their own immediate past values. Distant past values do not have any implications. This study suggests that short run macroeconomic policy would be beneficial to influence the foreign exchange market and eventually the performance of export of Bangladesh.

scholarly journals How Fiscal Policy in Bulgaria may Affect the Transition to a Low Carbon Economy?

2020 ◽  
Vol 26 (4) ◽  
pp. 525-535
Keyword(s):  
Fiscal Policy ◽  
Policy Instruments ◽  
Macroeconomic Policy ◽  
Currency Board ◽  
Low Carbon ◽  
Low Carbon Economy ◽  
Policy Goals ◽  
Short Run ◽  
Macroeconomic Environment ◽  
Carbon Economy

The adaptation of traditional macroeconomic policy goals to new ecological realities assigns a specific role to macroeconomic policy. We model the short-run transmission mechanism of fiscal policy under Currency Board Arrangements in Bulgaria in order to assess the fiscal policy potential to boost sustainable economic development and compensate for the economic growth losses due to decarbonisation of the economy. We find that fiscal policy instruments in Bulgaria have no statistically significant effect on GDP components considered separately but they do have a complex effect on macroeconomic environment in the country. This indicates that specific fiscal policy effects to support the transition to a low-carbon economy in Bulgaria cannot be expected and the structural policies should be followed.

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