Reassessing the Role and Modalities of Fiscal Policy in Advanced Economies

Policy Papers ◽  
2013 ◽  
Vol 2013 (56) ◽  
Author(s):  
Keyword(s):  
Fiscal Policy ◽  
Fiscal Sustainability ◽  
Fiscal Institutions ◽  
Fiscal Adjustment ◽  
Advanced Economies ◽  
Fiscal Risks ◽  
Adjustment Programs

This paper investigates how developments during and after the 2008–09 crisis have changed economists’ and policymakers’ views on: (i) fiscal risks and fiscal sustainability; (ii) the effectiveness of fiscal policy as a countercyclical tool; (iii) the appropriate design of fiscal adjustment programs; and (iv) the role of fiscal institutions.

Fiscal Adjustment for Stability and Growth

Policy Papers ◽  
2006 ◽  
Vol 2006 (1) ◽  
Author(s):  
Keyword(s):  
Fiscal Policy ◽  
Individual Country ◽  
Fiscal Institutions ◽  
Fiscal Adjustment ◽  
Macroeconomic Stability

This paper aims to inform policymakers, and other interested parties, about the IMF’s approach to fiscal adjustment. The approach focuses on the role of sound and sustainable government finances in promoting macroeconomic stability and growth. Achieving, and maintaining, such a fiscal position often requires adjusting fiscal policy, as well as strengthening fiscal institutions. Fiscal adjustment may involve either tightening or loosening the fiscal stance, depending on individual country circumstances.

scholarly journals Assessing Swaziland’s Fiscal Sustainability and Policy Options

2015 ◽  
Vol 2015 ◽  
pp. 1-10
Author(s):  
Albert Mafusire
Keyword(s):  
Fiscal Policy ◽  
Government Expenditure ◽  
Fiscal Sustainability ◽  
Fiscal Crisis ◽  
Customs Union ◽  
Policy Options ◽  
Main Motivation ◽  
Trend Line ◽  
Fiscal Adjustment ◽  
Short Run

In 2011, Swaziland’s fiscal policy was extensively scrutinized following its worst fiscal crisis in decades. The impacts of fiscal adjustment on Swaziland’s growth, inflation, and sectoral allocations of resources were some of the issues analyzed. The fall in the Southern African Customs Union revenue receipts to levels below the trend line, for two consecutive years, and the fiscal challenges that followed were the main motivation behind this interest. This paper attempts to establish whether fiscal sustainability was threatened, and if so what were the policy options? Based on the results from econometric estimations, using a sample for the 1986 to 2012 period, I show that the country’s fiscal sustainability was not threatened. However, calculations of the tax gap and the primary gap covering the period 2000 to 2016 reveal that fiscal sustainability was threatened. Subject to the major drivers of government expenditure and revenue handles, it is concluded that, in the short run, the two needed to be realigned while also allocating more resources to support growth.

scholarly journals Fiscal sustainability and public debt in an endogenous growth model

2008 ◽  
Vol 9 (2) ◽  
pp. 277-302 ◽  
Author(s):  
JESÚS FERNÁNDEZ-HUERTAS MORAGA ◽  
JEAN-PIERRE VIDAL
Keyword(s):  
Fiscal Policy ◽  
Endogenous Growth ◽  
Public Debt ◽  
Overlapping Generations ◽  
Fiscal Sustainability ◽  
Fiscal Rules ◽  
Human Capital Formation ◽  
Fiscal Adjustment ◽  
Educational Spending ◽  
Endogenous Growth Model

AbstractThis paper investigates fiscal sustainability in an overlapping generations economy with endogenous growth coming from human capital formation through educational spending. We assess how budgetary imbalances affect economic dynamics and the outlook for economic growth, thereby providing a rationale for fiscal rules ensuring sustainability. Our results show that the appropriate response of fiscal policy to temporary shocks is not trivial in the absence of fiscal rules. Fiscal rules allow for a timely reaction, thereby avoiding possibly disruptive fiscal adjustment in the future: the more adjustment is delayed, the larger its necessary scale is. We perform a rough calibration of the model to simulate the effects of a demographic shock (change in the population growth rate) under different fiscal policy scenarios.

Public Finance and Fiscal Policy in South Africa

2021 ◽  
pp. 934-955
Author(s):  
Tania Ajam
Keyword(s):  
Fiscal Policy ◽  
Global Financial Crisis ◽  
African National Congress ◽  
Policy Uncertainty ◽  
Potential Growth ◽  
Fiscal Institutions ◽  
Wage Bill ◽  
Fiscal Adjustment ◽  
State Capture ◽  
The Global Financial Crisis

This chapter explores the trajectory of post-apartheid fiscal policy, focusing on the growth, equity, and sustainability trends between 2009 and 2019. Buoyed by the commodity boom, the African National Congress governing party strengthened fiscal institutions, improving the credibility and solvency of fiscal policy in the first fourteen years after the democratic transition. The decade after the global financial crisis in 2008 saw declining potential growth rates, deteriorating terms of trade, the institutionalization of state capture during the Zuma administration until 2018, policy uncertainty, widespread electricity outages, and a burgeoning public-sector wage bill. Rising deficits, debt, and state-owned-enterprise contingent liabilities triggered austerity without genuine fiscal consolidation. The coronavirus pandemic amplified these unsustainable trends arising from deferred structural fiscal adjustment.

scholarly journals Fiscal Adjustment: Trade-offs of Macro-economic Goals and Recent Policy Reforms in Pakistan

1998 ◽  
Vol 37 (4II) ◽  
pp. 1123-1142 ◽  
Author(s):  
Mushtaq Ahmad
Keyword(s):  
Fiscal Policy ◽  
Economic Policies ◽  
Policy Reforms ◽  
Fiscal Discipline ◽  
User Charges ◽  
Fiscal Adjustment ◽  
Policy Goals ◽  
Trade Offs ◽  
The Government

Fiscal policy, being an embodiment of government measures to raise resources through taxes, tariffs of utilities, user charges and pricing of public sector goods, diverts resources from private sector to the government which rechannels these resource into socially preferred activities. The resource diversion and their rechannelisation helps achieve certain economic goals, and for this reason, the fiscal policy has strong interactive linkages with other macro economic policies. By virtue of this strong bond, the fiscal indicators have a close interactive association with other macro economic indicators. For this reason, the role of fiscal policy is inevitably vulnerable to influences of other economic policies and fiscal discipline and general economic health of the country become interlinked. This linkage results in generating trade offs between different macroeconomic policy goals.

Budgeting and implementing fiscal policy in Italy

2014 ◽  
Vol 34 (3) ◽  
pp. 475-506 ◽  
Author(s):  
Alessandra Cepparulo ◽  
Francesca Gastaldi ◽  
Luisa Giuriato ◽  
Agnese Sacchi
Keyword(s):  
Fiscal Policy ◽  
Fiscal Sustainability ◽  
Forecast Errors ◽  
Empirical Methods ◽  
Fiscal Illusion ◽  
Final Data ◽  
Biased Estimators ◽  
One Year

AbstractForecast errors in budgetary variables are frequent. When systematic, they are a source of concern, as they signal misconduct in fiscal policymaking, undermine the government’s credibility and compromise long-term fiscal sustainability. This paper analyses the characteristics of fiscal forecasting and implementation errors in Italy usingreal-timedata over the period 1998–2009. Several empirical methods are applied in order to identify the features of policymakers’ behaviour in preparing and implementing annual fiscal policy and to discover potential determinants in the formation of the implementation errors. Our results show that implemented budgetary plans systematically fall short one year ahead of ambitious planned adjustments for the main public finance aggregates. Fiscal illusion dominates revenue and GDP forecasting, and preliminary data releases are severely biased estimators of the final data, especially for expenditures. The role of the parliamentary session in driving a severe expenditure drift is confirmed.

scholarly journals Fiscal Policy Challenges for Countries that Join the EU

2019 ◽  
Vol 5 (2) ◽  
pp. 48
Author(s):  
Ilda Kadrimi Blaceri ◽  
Armela Anamali
Keyword(s):  
Fiscal Policy ◽  
Social Issues ◽  
Economic Life ◽  
Fiscal Sustainability ◽  
Controversial Issues ◽  
Policy Debate ◽  
Role Of Government ◽  
The Status ◽  
High Level

The choice of fiscal policy is one of the most controversial issues of the role of government in a country's social and economic life, not only by economists, but by a wider range of people.This article will discuss some of the issues on which the fiscal policy debate remains open. The analysis will focus on both the theoretical approach and the role that fiscal policy has played in our country, going further on some suggestions for the future. It will also analyze the status of fiscal policy in Albania seen in the context of fiscal sustainability. It will address the role that fiscal policy plays in social issues and the role of politics in the choice of fiscal policy. In a country with high level of poverty and an economy that requires large investments, the choice of fiscal policies is a controversial issue. This issue will focus on their impact on the economy of our country. The article concludes with conclusions and recommendations.

Evaluation of Fiscal Policy Effect of China’s Photovoltaic Industry

2018 ◽  
pp. 111-116 ◽  
Author(s):  
Gang AN ◽  
Hang WANG
Keyword(s):  
Fiscal Policy ◽  
Research And Development ◽  
Operating Performance ◽  
Fiscal Policies ◽  
Micro Data ◽  
Policy Effect ◽  
Policy Suggestions ◽  
Asset Size ◽  
The Empirical Analysis

To explore the role of fiscal policies in promoting the development of photovoltaic industry, the effects of financial subsidies on the development of China’s photovoltaic industry were analyzed by using the micro data of listed companies. The empirical analysis results in this study indicate that the fiscal policies represented by financial subsidies play a remarkable positive impetus function and financial subsidies are positively correlated with the operating performance of Photovoltaic enterprises. With larger the asset size and higher the Research and Development (R&D) investments, the operating performance of Photovoltaic enterprises is the better. Based on the above results, this study puts forward some policy suggestions on optimizing fiscal policy tools and further promoting the development of photovoltaic industry.

Sign in / Sign up

Export Citation Format

Share Document