scholarly journals PECULIARITIES OF STATE POLICY IN THE FIELD OF ANTI-CYCLIC REGULATION OF ECONOMY - THEORY AND METHODOLOGY

Author(s):  
Taras Marshalok

Introduction. Economic cycles, the periodic emergence of economic imbalances, deep economic crises, the need for effective management of economic fluctuations have created the need to develop an effective mechanism for anti-cyclical economic regulation. As a result of the in-depth study of these problems, it has been established that the most effective instruments of anti-cyclical economic regulation are financial instruments owned by the state and divided into monetary and fiscal ones. They in turn are divided into discretionary and non-discretionary, and regulated by legislative acts and regulatory documents. As a result of a retrospective analysis of management of economic cycles through the use of financial means of the state, it has been proved that monetary policy is less sustainable than economic fiscal policy. On the contrary, for the last century, precarious monetary policy has caused many financial and economic upheavals; the world has seen at least three monetary and monetary systems that have been subject to a downturn every time. Therefore, it is not worth considering monetary policy sufficiently effective in the implementation of anti-cyclical regulation. While fiscal policies each time, in all economic crises, have played the role of a "lifeline" for countries that have taken anti-cyclical economic regulation measures. That is why the study of the problem of effective state management of socio-economic fluctuations is one of the most urgent issues of economic science. The goal of the work. To investigate the essence of monetary and fiscal instruments of counter-cyclical regulation of the economy, to identify their strengths and weaknesses, to propose effective mechanisms of counter-cyclical regulation of the economy, which would ensure economic development in the country. Methods. In the course of the research, general scientific and empirical methods of economic science based on a systematic approach are used, in particular: methods of scientific knowledge: dialectical and logical, analysis and synthesis, generalization, graphical, scientific abstraction - in the study of state financial policy in the field of anti-cyclical regulation of the economy. Results. The article deals with the essence of monetary and monetary systems, analyzes their weak and strong sides, identifies the causes of their decline. It was established that monetary factors influenced the emergence of centers of economic crises. The essence of fiscal policy, its types and models, and the way in which its instruments influence the course of the economic cycle are considered and deeply analyzed. The mechanisms of fiscal policy, which should be used by the state at different stages of the economic cycle, are singled out. It is proved that in economically developed countries during the economic crisis it is expedient to use a socially-oriented model of fiscal policy of acyclic nature that most effectively influences the overcoming of economic imbalances and is capable of ensuring the economic equilibrium in the country as soon as possible. Countries that effectively applied the liberal model of fiscal policy, in the conditions of the economic crisis, were forced to resort to transformation towards a more rigid fiscal intervention by the state in economic processes-they were forced to use socially-oriented, acyclic fiscal policies. Only the wider participation of the state in the regulation of economic processes have ensured the rapid and effective overcoming of economic crises, and contributed to the achievement of economic development in most countries of the world. Perspectives. The results of scientific research can be useful for scientists and practitioners who are engaged in research on problems of anti-cyclical regulation of the economy, state financial policy and, in particular, fiscal policy.

2020 ◽  
Vol 26 (5) ◽  
pp. 964-990
Author(s):  
N.I. Kulikov ◽  
V.L. Parkhomenko ◽  
Akun Anna Stefani Rozi Mobio

Subject. We assess the impact of tight financial and monetary policy of the government of the Russian Federation and the Bank of Russia on the level of household income and poverty reduction in Russia. Objectives. The purpose of the study is to analyze the results of financial and monetary policy in Russia and determine why the situation with household income and poverty has not changed for the recent six years, and the GDP growth rate in Russia is significantly lagging behind the global average. Methods. The study employs methods of analysis of scientific and information base, and synthesis of obtained data. The methodology and theoretical framework draw upon works of domestic and foreign scientists on economic and financial support to economy and population’s income. Results. We offer measures for liberalization of the financial and monetary policy of the government and the Central Bank to ensure changes in the structure of the Russian economy. The proposed alternative economic and financial policy of the State will enable the growth of real incomes of the population, poverty reduction by half by 2024, and annual GDP growth up to 6 per cent. Conclusions. It is crucial to change budget priorities, increase the salaries of public employees, introduce a progressive tax rate for individuals; to reduce the key rate to the value of annual inflation and limit the bank margin. The country needs a phased program to increase the population's income, which will ensure consumer demand.


2017 ◽  
Vol 10 (1) ◽  
pp. 220
Author(s):  
Kabanda Richard ◽  
Peter W. Muriu ◽  
Benjamin Maturu

The aim of this study was to explain the relative effectiveness of monetary and fiscal policies in explaining output in Rwanda. The study used a sample of quarterly data for the period 1996-2014. Applying a recursive VAR, the study used 12 variables, including 5 endogenous and 7exogenous variables to the benchmark model and other two specifications were attempted to capture the true contribution of monetary and fiscal policies to variations in nominal output. Obtained results using impulse responses and variance decomposition provide evidence that monetary policy is more effective than fiscal policy in explaining changes in nominal output in Rwanda. In addition, monetary policy explains better output when the VAR model contains domestic exogenous variables than when they are not included, suggesting the relevance of including domestic exogenous variables in VAR specification of monetary and fiscal policies effectiveness on economic variables. Another suggestion is that in order to achieve higher growth, the government of Rwanda should rely more on monetary policy as compared to fiscal policy.


Author(s):  
Philip Arestis ◽  
Malcolm Sawyer

Macroeconomic policies come from the “vision” of the ways in which an economy works. A “vision” of the economy where unemployment is a frequent occurrence gives rise to quite different policies from a “vision” of the economy in which there is little room for unemployment of labor, as, for example, in the New Classical macroeconomics. The macroeconomic vision that underlies the policy agenda of this chapter is described as Kaleckian-Keynesian, as it draws on the works and ideas of Michal Kalecki and John Maynard Keynes and others that approach the matter in a similar fashion. This chapter explores a modern Kaleckian-Keynesian framework for economic theory and policy. It first discusses fiscal policy, the main instrument of macroeconomic policy, before turning to monetary policy as well as financial policy, inflation, and policies that relate to product markets and labor markets.


2016 ◽  
Vol 4 (1) ◽  
pp. 107
Author(s):  
Eleni Vangjeli ◽  
Anila Mancka

Monetary and fiscal policies are two policies that the government could use to keep a high level of growth, with a low inflancion. Fiscal policy has its initial impact on the stock market, while monetary policy in market assets. But, given that the goods and active markets are closely interrelated, both policies, monetary as well as fiscal have impact on the economy, increasing the level of product through the reduction of interest rates. In our paper we will show how functioning monetary and fiscal policies. But also in our paper we will analyze the different factors which have affected the economic growth of the country. The focus of our study is the graphical and empirical analysis of economic growth, policies and influencing factors. For the empirical analysis we have used data on the economic growth in Albania for 1996– 2014.


Author(s):  
Engin Oner

Adam Smith being its founder, in the Classical School, which gives prominence to supply and adopts an approach of unbiased finance, the economy is always in a state of full employment equilibrium. In this system of thought, the main philosophy of which is budget balance, that asserts that there is flexibility between prices and wages and regards public debt as an extraordinary instrument, the interference of the state with the economic and social life is frowned upon. In line with the views of the classical thought, the classical fiscal policy is based on three basic assumptions. These are the "Consumer State Assumption", the assumption accepting that "Public Expenditures are Always Ineffectual" and the assumption concerning the "Impartiality of the Taxes and Expenditure Policies Implemented by the State". On the other hand, the Keynesian School founded by John Maynard Keynes, gives prominence to demand, adopts the approach of functional finance, and asserts that cases of underemployment equilibrium and over-employment equilibrium exist in the economy as well as the full employment equilibrium, that problems cannot be solved through the invisible hand, that prices and wages are strict, the interference of the state is essential and at this point fiscal policies have to be utilized effectively.Keynesian fiscal policy depends on three primary assumptions. These are the assumption of "Filter State", the assumption that "public expenditures are sometimes effective and sometimes ineffective or neutral" and the assumption that "the tax, debt and expenditure policies of the state can never be impartial".


Author(s):  
George K. Zestos ◽  
Andrew N. Geary ◽  
Kevin S. Cooksey

This study investigates the effectiveness of monetary and fiscal policies in the US by employing cointegration and a quatrovariate Vector Error Correction Model together with Granger causality tests. Two models are estimated: (i) nominal national income, the ten-year government bond yield, and two policy variables, the federal government deficit and the federal funds rate; (ii) real national income, and the other same three variables. Monetary and fiscal policies are jointly ineffective in influencing nominal national income. However, monetary and fiscal policies are jointly effective in influencing real national income. In contrast to the first model, only monetary policy was found to be reactive to changes in real national income and the long-term interest rate. The asymmetric responses of the two policies to changes in real economic activity are attributed to the fact that monetary policy is much more efficient in promptly responding to changes in economic conditions than fiscal policy.  


2017 ◽  
Vol 8 (2) ◽  
pp. 135
Author(s):  
Tu Tran Thi Thanh ◽  
Linh Pham Thuy ◽  
Tiep Nguyen Anh ◽  
Thuy Do Thi ◽  
Tho Thi Hoai Truong

This research evaluates impact of monetary policy tools and fiscal policies on Vietnam’s stock market, as well as examines interaction between these two policies with the Vietnam stock price index. Utilizing Vector error correction model (VECM), with 9 variables and data monthly statistics from January 2002 to October 2015, this study confirms that there are links between monetary policy, fiscal policy with Vietnam's stock market. In addition, Vietnam’s stock market is also affected by exogenous factors, namely the world oil prices and the S&P500 index, especially when Vietnam's economy is opening up and integrated with the global economy.


2016 ◽  
Vol 4 (2) ◽  
pp. 91
Author(s):  
Supangat Supangat

<p><em>As part of the  mu</em><em>’</em><em>amalah discourse, fiscal policy in Islam is flexible and open to ijtihad. Texts related to fiscal policy can not be separated from the socio  historical circumstances early Islamic society. Interpretation must use a contextual approach</em><em>, </em><em>although the mechanism may be different contextualisation. With the above formulation, this study  found in common principles and objectives of the State</em><em>’</em><em>s fiscal policy in Indonesia. In fact, some types of taxes collected by the government is a reformulation of the tax that is applied in the early days of Islam. Thus, the system of fiscal policies during the State of Indonesia is still in the corridors of Shari</em><em>’</em><em>ah. However, implementation of such systems is still far from the expected. With the point of the equation, the government can implement fiscal policies of an Islamic state in accordance with the laws and culture of Indonesia. In this paper, the authors propose the idea to the admissibility of zakat and taxation as a source of state revenue.</em></p>


2017 ◽  
Vol 3 (2) ◽  
pp. 42
Author(s):  
Yutaka Kurihara

Japan has been under recession for more than twenty years. During that period, drastic measures to overcome deflation have been undertaken. Unconventional monetary policy and huge amounts of fiscal policy have been repeatedly implemented. This paper examines whether or not these policies were effective with a focus on exchange rates. The empirical results showed that recent monetary policies are effective at present and the effectiveness of fiscal policies has been decreasing. On the other hand, exchange rate depreciation has boosted the Japanese economy. Stock prices and wages are related strongly with the economic boom. These variables are important factors to the economy.


Author(s):  
Neil Wallace

This chapter is a variation on the theme that monetary and fiscal policies are interrelated and must necessarily be coordinated. The issue of coordination arises when one wants to know whether it is possible for monetary policy permanently to influence an economy's inflation rate. One can imagine a monetary authority sufficiently powerful vis-à-vis the fiscal authority that by the imposition of slower rates of growth of base money, both now and into the indefinite future, it can successfully constrain fiscal policy by telling the fiscal authority how much seigniorage it can expect now and in the future. In this setting, monetary and fiscal policies are coordinated by having the monetary authority discipline the fiscal authority. The chapter first describes a simple model that embodies unadulterated monetarism before discussing the Cagan-Bresciani-Turroni effect.


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