Macro and micro effects of fiscal policy - experience from the COVID-19 pandemic: introduction to the thematic issue of Public Sector Economics

This article presents a comparative analysis of the optimal fiscal response to shocks in the sub-national public sector in cooperative and non-cooperative models. The analysis is undertaken by comparing models that assume idiosyncratic demandside shocks and sub-national autonomy to collect taxes, with models that assume that the central government collects the taxes of the whole country and redistributes them across regions. Results show that under symmetrical conditions, the non-cooperative solution may result in greater stabilization and lower sub-national public expenditure than the cooperative solution. However, if regional asymmetries are introduced into the model, results may be reversed.

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Integrative literature review of the financial fragility hypothesis proposed by Minsky

10.31124/advance.17263079 ◽

2021 ◽

Author(s):

Cláudio Caríssimo ◽

Francisval Melo Carvalho ◽

carlos eduardo Stefaniak Aveline ◽

Mozar José de Brito ◽

rafaela maiara caetano

Keyword(s):

Public Sector ◽

Fiscal Policy ◽

Literature Review ◽

Interest Rates ◽

Cash Flow ◽

Empirical Studies ◽

Financial Fragility ◽

Financial Instability ◽

The Public ◽

Theoretical Assumptions

This paper conducts an Integrative Literature Review on the Financial Fragility Hypothesis presented by Minsky and on Financial Fragility Applied to the Public Sector. Twenty papers were chosen that addressed the proposed theme in both quantitative and qualitative procedures. The topics discussed ways of measuring financial fragility, effects on fiscal policy and need for regulation, relations between investment, cash flow expectations, the influence of interest rates and indebtedness on firms, and financial instability. The integration reinforced the conceptual aspects and propositions presented by Minsky, broadening in an integrated way the understanding of his theoretical assumptions regarding financial fragility, addressing the causes, observations, and economic and institutional consequences, in addition to signaling for insufficiencies of more empirical studies and the public sector.

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Financial Crisis and Fiscal Policy: An Assessment of the EU-Member Balkan States

International Conference on Eurasian Economies 2014 ◽

10.36880/c05.00951 ◽

2014 ◽

Author(s):

Servet Akyol

Keyword(s):

Public Sector ◽

Fiscal Policy ◽

Public Debt ◽

Financial Sector ◽

Fiscal Policies ◽

Economic Activities ◽

Public Deficit ◽

Debt Burden ◽

Balkan States ◽

The Eu

The objective of this paper is to study the economic and social results of the post-crisis fiscal policies concerning the Balkan States that are members of the EU. The global crisis, which broke out in the US in 2008, had a deep effect on both developed and developing countries. Until today different policies have been put on the agenda in order to eliminate or alleviate the impacts of the crisis. In this context, bailout and stimulus packages were firstly implemented. Stimulus packages were replaced by austerity policies because of the increasing public debt and budget deficit after 2010. Fiscal policy focused on reducing the debts instead of supporting the economic activities. This study is based on historical and descriptive method. It examines the development of post-crisis fiscal policies in the Balkan States that are members of the EU. In this study, public expenditure, public debt, public deficit and unemployment rate are used as the main indicators. The effects of fiscal policy will be compared between countries. This study also suggests that although the crisis resulted from financial sector, burden of crisis was transferred to public sector. Moreover, in many countries, because of its increasing deficit and debt burden, public sector became depended on financial sector that was rescued before. After the crisis, fiscal policies has led to significant economic and social costs in the Balkan States that are members of the EU.

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Monetary and Fiscal Policy Analysis With an Agent-Based Macroeconomic Model

Jahrbücher für Nationalökonomie und Statistik ◽

10.1515/jbnst-2008-2-308 ◽

2008 ◽

Vol 228 (2-3) ◽

Cited By ~ 8

Author(s):

Gottfried Haber

Keyword(s):

Public Sector ◽

Fiscal Policy ◽

Policy Analysis ◽

Macroeconomic Policy ◽

Formation Mechanisms ◽

Agent Based Models ◽

Agent Based ◽

Expectation Formation ◽

The Public ◽

High Level

SummaryMacroeconomic policy analysis is a challenge for agent-based models because these types of model are generally much elaborated on the specific market levels for partial (micro) markets, but have been of limited use for macroeconomic policy issues due to calibration and “model closure” issues.Moreover, macroeconomic policy measures at a high level of aggregation, such as general fiscal policy and monetary policy, tend to include several microeconomic aspects determined by the macroeconomic policy makers (i.e. the specific process of money transmission, budget constraints within/for the public sector, etc.), which are not usually captured by agent-based models with an emphasis on microfoundation. Thus, a fully-specified macroeconomic agent-based model, AS1, is applied in this paper. Specifically, the monetary sector is modeled in detail, and both the central bank and the public sector are set up as separate agents with their own expectations and behavior. The paper has two aims: (a) to show that economic policy may be analyzed in this context with more elaborate expectation formation mechanisms than in traditional models, and (b) to demonstrate that this might change the assessment of policy effectiveness. Two illustrative examples for monetary and fiscal policies are presented with different levels of rationality and differences in the expectation formation process.

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The Uncertainty of Government Debt Projections

National Institute Economic Review ◽

10.1177/0027950106064167 ◽

2006 ◽

Vol 195 ◽

pp. 58-59 ◽

Cited By ~ 1

Author(s):

Ian Hurst ◽

Rebecca Riley

Keyword(s):

Public Sector ◽

Fiscal Policy ◽

Golden Rule ◽

Government Debt ◽

Economic Cycle ◽

The Public ◽

Sustainable Investment ◽

The Uk ◽

A Share

Since 1998, fiscal policy in the UK has been guided by two rules: the golden rule to borrow over the economic cycle only to invest, such that the average annual surplus on the public sector current budget as a share of GDP is greater or equal to zero; and the sustainable investment rule that public sector net debt should not exceed 40 per cent of GDP over the economic cycle.

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¿SINCRONIZACIÓN FISCAL EN EL NIVEL SUBNACIONAL? MÉXICO 1989-2016

Investigación Económica ◽

10.22201/fe.01851667p.2018.305.67620 ◽

2018 ◽

Vol 77 (305) ◽

pp. 40

Author(s):

Eduardo Ramírez Cedillo ◽

Francisco López Herrera

Keyword(s):

Public Finance ◽

Public Sector ◽

Fiscal Policy ◽

National Level ◽

Theoretical Framework ◽

Empirical Literature ◽

Fiscal Imbalance ◽

Panel Techniques ◽

The Relationship

RESUMENLa relación entre ingresos y gastos del sector público mexicano en el nivel subnacional, incluyendo su nivel de respuesta para recuperarse de un desequilibrio fiscal, ha recibido poca atención. Este artículo contribuye a la comprensión de esa relación, clave para el diseño de la política fiscal y las finanzas públicas. Nuestro marco teórico son las cuatro hipótesis prevalecientes en la vasta literatura teórica y empírica producida en el mundo, inicialmente enfocada en el nivel nacional y que se extiende ya al ámbito subnacional. El estudio que presentamos se basa en técnicas de análisis para paneles de datos que consideran la heterogeneidad de las entidades federativas. La evidencia muestra que predomina la sincronización fiscal con buenos niveles de respuesta para la recuperación de los desequilibrios; encontramos también algún apoyo para otras hipótesis. FISCAL SYNCHRONIZATION AT SUBNATIONAL LEVEL? MEXICO 1989-2016ABSTRACT<div>The relationship between income and expenditure of the Mexican public sector at subnational level —including its level of response to recover from a fiscal imbalance—, key to the design of fiscal policy and public finance, has received little attention. This article contributes to the understanding of such relationship. Our theoretical framework is based on the four hypotheses found in the vast theoretical and empirical literature, which initially focused on the national level and later on the subnational level. The present study relies on data panel techniques considering the heterogeneity of the Mexican republic’s states. The evidence shows predominance of fiscal synchronization with good levels of response for the recovery from imbalances; some support for other hypotheses is also found.</div>

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Working in the Public Sector Introduction to the Thematic Issue

Nordic Journal of Working Life Studies ◽

10.19154/njwls.v3i2.2547 ◽

2013 ◽

Vol 3 (2) ◽

pp. 1 ◽

Cited By ~ 5

Author(s):

Annette Kamp ◽

Lars Klemsdal ◽

Lena Gonäs

Keyword(s):

Public Sector ◽

Thematic Issue ◽

The Public

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The Priority of Exploiting Fiscal Revenue or Lessening Public Expenditure: Evidence from China

Applied Finance and Accounting ◽

10.11114/afa.v6i1.4731 ◽

2020 ◽

Vol 6 (1) ◽

pp. 54

Author(s):

Yu kun Wang ◽

Li Zhang ◽

We-me Ho

Keyword(s):

Public Sector ◽

Fiscal Policy ◽

Causal Relationship ◽

Public Expenditure ◽

Positive Impact ◽

Fiscal Deficit ◽

The Past ◽

Fiscal Revenue ◽

Fiscal Expenditure ◽

The Government

In the past 28 years, we find that except for the fiscal revenue of 5,132.1 billion yuan in 2007, which is greater than the fiscal expenditure of 4,978.1 billion yuan, presenting a fiscal surplus, the fiscal expenditure of the rest years is greater than the fiscal revenue, showing the situation of public sector net cash requirement (psncr), especially in 2011, the deficit( the gap between fiscal expenditure and fiscal revenue) is 537.3 billion yuan. Since then, the gap between expenditure and revenue has been increasing with each passing year. In 2015, the fiscal deficit is 2,368 billion yuan. In 2018, the fiscal deficit has been expanded to 3,754.4 billion yuan. In order to avoid the continuous increment of the deficit. This paper discusses the causal relationship between China's fiscal revenue and public expenditure from 1990 to 2018. If fiscal revenue has a positive impact on public expenditure, showing that the government shall reduce fiscal deficit through tax increment. On the contrary, it makes public expenditure continue to expand, leading to the continuous deterioration of fiscal deficit, so as to further decide whether China's future fiscal policy should adopt increasing fiscal revenue or deducting public expenditure policy to reduce the deficit.

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DESENTRALISASI FISKAL KONTEMPORER DALAM PERSPEKTIF KEBIJAKAN PUBLIK ISLAM

Journal of Innovation in Business and Economics ◽

10.22219/jibe.vol4.no1.1-12 ◽

2014 ◽

Vol 4 (1) ◽

pp. 1

Author(s):

Any Setianingrum

Keyword(s):

Public Sector ◽

Fiscal Policy ◽

Income Distribution ◽

Private Sector ◽

Voluntary Sector ◽

Optimum Allocation ◽

Institutional Framework ◽

Fiscal System ◽

Islamic Economic

One of the essential instruments designed for achieving the goals of sharia in Islam is fiscal policy. There are some key elements of Islamic fiscal theory, namely: 1) Islamic Economics, which comprises private sector, social/ voluntary sector, and public sector. The collaboration of these three sectors would provide an ideal Islamic economic institutional framework; 2) Zakat (taxation of income and wealth of a Muslim) as the basis of fiscal system; 3) Implementation of all fiscal instruments which disallow exploitation that results in usury (riba), uncertainty (gharar ), speculation, sinful (haram) products / services and all forms of meanness. 4) Allocation, distribution and stabilization functions of Islamic economics is administered and presented through all the sectors cooperatively; 5) Public sector does not affect significantly yet essential on condition that it works continuously to ensure optimum allocation of society resources, income distribution, and stability establishing

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The private saving glut and the developed countries' government financial balance

Review of Keynesian Economics ◽

10.4337/roke.2019.01.07 ◽

2019 ◽

Vol 7 (1) ◽

pp. 94-107 ◽

Cited By ~ 1

Author(s):

Leon Podkaminer

Keyword(s):

Public Sector ◽

Fiscal Policy ◽

Income Distribution ◽

Private Sector ◽

Private Investment ◽

Developed Countries ◽

Cyclical Growth ◽

The Developed Countries ◽

Financial Balance ◽

Financial Deficits

The ‘global saving glut’ à la Bernanke is not a serious problem for a large group of high-income countries considered collectively. More importantly, taken together these countries exhibit a tendency for a growing GDP share of private-sector saving and a falling GDP share of private investment. Given prevailing tendencies regarding income distribution and gross capital formation, the private sector of developed countries considered collectively is prone to accumulating ‘saving gluts’ which is reflected in persistent public-sector financial deficits. Fiscal policy may need to support growth with the debt-financed income injections more or less permanently, and not just in response to ‘cyclical’ growth slow-downs or occasional recessions.

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