scholarly journals SUBSIDIOS Y CONSUMO DENTRO LA ECONOMÍA BOLIVIANA

2020 ◽  
Vol 13 (21) ◽  
pp. 52
Author(s):  
Sazcha Marcelo Olivera-Villarroel ◽  
Maira Calderón Calderón
Keyword(s):  
Aggregate Demand ◽  
Moral Economy ◽  
Dynamic Effect ◽  
Lower Income ◽  
Monthly Income ◽  
Medium Term ◽  
Marginal Propensity To Consume ◽  
Marginal Propensity ◽  
Policies And Programs ◽  
The Impact

El estudio analiza los efectos de la aplicación de políticas y programas de dotación de subsidios en Bolivia. Teniéndose como objetivo central distinguir el impacto de estas políticas en el aumento de la demanda agregada de la economía y el incremento del consumo y/o inversión. Partiendo del cálculo aproximado de la propensión marginal a consumir – PMC- de la economía por tipo de consumidor y así obtener el multiplicador de la demanda.La implementación de estas políticas ha generado un incremento en los ingresos mensuales de las poblaciones beneficiarias correspondiente a los quintiles inferiores de ingreso. Si bien mejora sus condiciones de vida, modifica su consumo al corto y mediano plazo; por lo que el efecto dinámico del multiplicador es menor sobre la demanda agregada del país y en consecuencia en el PIB nacional. En tanto un subsidio no monetario, podría generar un movimiento económico regional.Palabras clave: Bienestar económico, Economía Moral, multiplicador de la demanda, propensión a consumir, subsidios. AbstractThe study analyzes the effects of the application of subsidy policies and programs in Bolivia. Having as a central objective to distinguish the impact of these policies in the increase of the aggregate demand of the economy and the increase of consumption and / or investment. Starting from the approximate calculation of the marginal propensity to consume - PMC- of the economy by type of consumer and thus obtain the demand multiplier.The implementation of these policies has generated an increase in the monthly income of the beneficiary populations corresponding to the lower income quintiles. Although it improves their living conditions, it modifies its consumption in the short and medium term; so the dynamic effect of the multiplier is less on the aggregate demand of the country and consequently on the national PIB. As a non-monetary subsidy, it could generate a regional economic movement.Key words: Economic welfare, Moral Economy, demand multiplier, propensity to consume, subsidies.

Effects of zero rating value added tax on government revenue in Namibia

2015 ◽  
Vol 6 (4) ◽  
pp. 343-355 ◽  
Author(s):  
Ojijo Odhiambo ◽  
John E. Odada
Keyword(s):  
Aggregate Demand ◽  
National Income ◽  
Value Added ◽  
Disposable Income ◽  
Government Revenue ◽  
Content Type ◽  
Goods And Services ◽  
Marginal Propensity To Consume ◽  
Long Run ◽  
Marginal Propensity

Purpose – The Government of Namibia has traditionally used fiscal (especially tax) policy as an instrument for annual budget formulation. Marginal tax rates for profits and various income brackets have been changed back and forth in response to changes in economic conditions. However, to date, no attempt has been made to evaluate the effectiveness of these reforms in achieving the broad national economic goals, in general, and the potential effects on government revenue in the short, medium and long-run periods, in particular. The purpose of this paper is to fill this information gap by analysing the implication of the 2008 zero-rating of value added tax (VAT) on basic commodities for aggregate demand and government revenue. Design/methodology/approach – The study uses an analytical framework based on economic theory which posits that in an open economy, which trades with the rest of the world, aggregate demand for goods and services is made up of consumption demand, investment demand, government demand and net exports and that real sector equilibrium is attained when aggregate supply of goods and services is equal to aggregate demand for goods and services. Findings – Using the Namibia Household Income and Expenditure Survey results, the annual loss in government revenue attributable to this policy is, ceteris paribus, estimated to be N$310.4 million. With a marginal propensity to consume out of disposable income of 0.89, total expenditure by households on goods and services is likely to increase by N$276.3 million per annum. In the medium-to-long-run, national income will have increased by N$303.9 million per annum. Taxes which are responsive to changes in the level of national income will have increased by N$85.7 million, compensating for just over one quarter of the estimated loss in government revenue of N$310.4 million. Research limitations/implications – The study has used a partial equilibrium model as opposed to computable general equilibrium model, which provides a consistent framework that meets most of the sectoral and institutional data requirements for the simple reason that a social accounting matrix which can be used readily to connect data from different sources, such as national accounts and household surveys and would thus have been ideal model for analysing the impacts of the VAT tax reform has not been developed for Namibia. Practical implications – The paper provides a number of practical policy options available for government including, but not limited to, increasing direct taxes, VAT rate on specific (luxury) goods and services and statutory VAT rate on all other commodities not zero-rated, other taxes such as taxes; and borrowing from external sources. Social implications – It is established that zero-rating VAT on all the basic commodities in 2008 reduces the VAT paid by all Namibian households by N$310.4 million per year, which represents the annual increase in the disposable income of all households. And with a marginal propensity to consume out of disposable income of 0.89, total expenditure by households on goods and services will increase by N$276.3 million per year. Originality/value – This paper presents the first attempt at evaluating the effectiveness of tax (VAT) policy reforms in Namibia in achieving the broad national economic goals, in general, and the potential effects on government revenue in the short, medium and long-run periods, in particular.

Aggregate Demand, Vertical Specialization and Growth Accounting

2016 ◽  
Vol 07 (03) ◽  
pp. 1650016
Author(s):  
Hubert Escaith
Keyword(s):  
Income Elasticity ◽  
Developing Economies ◽  
Supply And Demand ◽  
Aggregate Demand ◽  
International Perspective ◽  
Growth Accounting ◽  
Marginal Propensity To Consume ◽  
Marginal Propensity ◽  
Global Economic Governance

Global manufacturing and international supply chains have changed the way trade and economic growth are understood today. Recent statistical advances suggest new ways of looking at growth accounting when global value chains (GVCs) — articulating supply and demand chains from an international perspective — are taken into consideration. The method is applied to the G-20 countries, a group of leading developed and developing economies that took a prominent role in fostering and managing global economic governance. The demand dynamics is first analyzed through a growth-accounting decomposition, then through the long term determinants of income elasticity of imports and the household marginal propensity to consume imported products.

The Response of Consumption to Unanticipated Changes in Income

2017 ◽  
Author(s):  
Tullio Jappelli ◽  
Luigi Pistaferri
Keyword(s):  
Insurance Markets ◽  
Income Shocks ◽  
Experimental Setting ◽  
Subjective Expectations ◽  
The Third ◽  
Marginal Propensity To Consume ◽  
Quasi Experimental ◽  
Marginal Propensity ◽  
The Impact ◽  
Joint Behavior

In this chapter we examine tests of the hypothesis that consumption will respond to unanticipated income changes and that the response will depend on the persistence of the shock and on the degree of imperfection in the credit and insurance markets. The literature has considered three approaches to estimating the effect of income shocks on consumption, that is, the marginal propensity to consume. One identifies episodes in which income changes unexpectedly and seeks to evaluate, in a quasi-experimental setting, how consumption reacts. A second estimates the marginal propensity to consume with respect to income shocks using the covariance restrictions imposed by theory on the joint behavior of consumption and income growth. The third estimates the impact of shocks by combining realizations and expectations of income or consumption in surveys where data on subjective expectations are available.

scholarly journals Economic Analysis of the Effects of Rice Price Distortions in Pakistan: 1975-90

1993 ◽  
Vol 32 (4II) ◽  
pp. 859-872
Author(s):  
Nuzhat Iqbal
Keyword(s):  
Low Income ◽  
Price Change ◽  
Commodity Prices ◽  
Food Prices ◽  
Low Income Countries ◽  
Goods And Services ◽  
Marginal Propensity To Consume ◽  
Marginal Propensity ◽  
The Impact ◽  
Price Distortions

Price distortions induce inefficient utilisation of resources by giving incorrect signals to producers and consumers. Since distorted prices do not reflect the real value of resources, quantities of goods and services produced may not be consistent with their demand. The price Distortions may be caused by a number of different reasons. They may, for instance, be caused by monopolistic tendencies, preferential treatment of a particular sector of economy, establishment of diffusion of a particular product or an input, etc. In fact, price distortions occur sometimes from deliberate and sometime inadvertent Government policies of subsidies and price supports in pursuance of certain social or economic objectives. Both producers and consumers maximise their economic welfare by allocating their resources in response to price signals from a fully comPetitive market. Since movements in commodity prices especially food prices affect producers and consumers in exactly the opposite way, fixation of their prices in developing countries represents a policy dilemma. While prices of all items used by consumers and .producers are iml?ortant, food prices carry a unique significance in low income countries where the marginal propensity to consume is very high. Since farm producers are also food consumers, the net impact of a food price change in their case will depend on the extent to which they have emerged from a subsistence economy. However, if inputs are subject to price fixation, the impact will be felt more readily and directly. In fact, where there is no Government intervention, prices equilibrate consumer demand with the productive capacities of producers. If prices are distorted by any agency~ their allocative role is seriously diminished. Imperfections of both size and operation being prevailed ultimately induce misallocation of resources in the country. Resource use efficiencies increase, if government restricts its role to ensuring proper functioning of the market and lets the prices to be determined by the forces of demand and supply.

scholarly journals Empirical Measure of Wealth Effects in Household Consumption: The Case of Congo

2018 ◽  
Vol 5 (5) ◽  
pp. 33
Author(s):  
Idrys Fransmel OKOMBI
Keyword(s):  
Value Added ◽  
Household Consumption ◽  
Wealth Effects ◽  
Empirical Measure ◽  
Marginal Propensity To Consume ◽  
Marginal Propensity ◽  
Short And Long Term ◽  
The Government ◽  
The Impact

The purpose of this article is to determine the impact of wealth in household consumption, by focusing on wealth under monetary form. In this way, the correction error model ARDL type is used. The outcome estimations show a significant existence of wealth effect on a period 1991.Q1-2016.Q1. In this way, the marginal propensity to consume wealth equals 0,476 to a short term. However, this marginal propensity to consume wealth, though being significant and positive is down to the marginal propensities to consume income available in the long term that are up to 0,695 and 0,777 as regard the short and long term. Nevertheless, to improve the households’ consumption level, the Congolese government can boost the monetary wealth by decreasing prices. More specifically, the government needs to lower value added tax (VAT).

scholarly journals Monetary Policy when Households have Debt: New Evidence on the Transmission Mechanism

2019 ◽  
Vol 87 (1) ◽  
pp. 102-129 ◽  
Author(s):  
James Cloyne ◽  
Clodomiro Ferreira ◽  
Paolo Surico
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Aggregate Demand ◽  
Balance Sheet ◽  
Household Survey ◽  
Housing Tenure ◽  
Balance Sheets ◽  
Marginal Propensity To Consume ◽  
Crucial Difference ◽  
Marginal Propensity

Abstract Using household survey data for the U.S. and the U.K., we show that the aggregate response of consumption to interest rate changes is driven by households with a mortgage. Outright home-owners do not adjust expenditure at all while renters change their spending but by less than mortgagors. Income rises for all households as interest rate cuts directly affect firm investment and household consumption, boosting aggregate demand. A crucial difference between the housing tenure groups is the composition of their balance sheets: mortgagors hold sizable illiquid assets but little liquid wealth. Our results reveal that general equilibrium effects on household income coupled with balance-sheet-driven heterogeneity in the marginal propensity to consume play a key role in the transmission of monetary policy.

'Planning Economic Integration7, by L.B.M. Mennes, Rotterdam University Press, 1973.

1973 ◽  
Vol 12 (4) ◽  
pp. 438-439
Author(s):  
G. M. Radhul
Keyword(s):  
Economic Integration ◽  
Point Of View ◽  
Planning Model ◽  
Integration Policy ◽  
Medium Term ◽  
Future Production ◽  
Planning Models ◽  
Partici Pant ◽  
The Impact ◽  
Integration Area

The book under review deals with economic integration among deve¬loping countries from the point of view of planning. The author believes that it is useful to approach economic integration from a planning point of view and to develop planning models for it, because the theory of economic integration relevant for developing countries should be directed towards the impact of integration on future investments and future production. The type of models used in the book are the multisector linear programming models and the method of analysis is essentially a comparison of two situations; one with economic integration and the other without. For each prospective partici¬pant a medium term planning model is drawn up taking account of its economic situation in some base year. The results of these single country planning models are analysed and compared to those of a similar planning model for the integration area as a whole. The consequences of the integration policy are then evaluated.

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