scholarly journals An Empirical Test on the Validity of China’s Fiscal Policy ——Based on the Ricardian Equivalence Proposition

2010 ◽  
Vol 5 (8) ◽  
Author(s):  
Wen Fang ◽  
Jing Ma ◽  
Ye Sheng
Keyword(s):  
Fiscal Policy ◽  
Empirical Test ◽  
Ricardian Equivalence

scholarly journals DESIGNING MONETARY AND FISCAL POLICY RULES IN A NEW KEYNESIAN MODEL WITH RULE-OF-THUMB CONSUMERS

2012 ◽  
Vol 18 (2) ◽  
pp. 395-417 ◽  
Author(s):  
Raffaele Rossi
Keyword(s):  
Steady State ◽  
Fiscal Policy ◽  
Public Debt ◽  
New Keynesian ◽  
Ricardian Equivalence ◽  
New Keynesian Model ◽  
Policy Rules ◽  
Rule Of Thumb ◽  
Keynesian Model ◽  
Monetary And Fiscal Policy

This paper studies the determinacy properties of monetary and fiscal policy rules in a small-scale New Keynesian model. We modify the standard model in two ways. First, we allow positive public debt in the steady state as in Leeper [Journal of Monetary Economics 27, 129–147 (1991)]. Second, we add rule-of-thumb consumers as in Bilbiie [Journal of Economic Theory 140, 162–196 (2008)]. Leeper studied a model in which Ricardian equivalence holds, and he showed that monetary and fiscal policy can be studied independently. In Bilbiie's analysis, rule-of-thumb consumers break the Ricardian equivalence and generate important consequences for the design of monetary policy. In his model, steady-state public debt was equal to zero. We study a model with both rule-of-thumb consumers and positive steady-state public debt. We find that the mix of fiscal and monetary policies that guarantees equilibrium determinacy is sensitive to the exact values of the parameters of the model.

scholarly journals Empirical test of the Ricardian Equivalence in the Kingdom of Lesotho

2017 ◽  
Vol 5 (1) ◽  
pp. 1351674 ◽  
Author(s):  
Teboho Jeremiah Mosikari ◽  
Joel Hinaunye Eita ◽  
Kwok Tong Soo
Keyword(s):  
Empirical Test ◽  
Ricardian Equivalence

scholarly journals Dynamic Scoring: An Assessment of Fiscal Closing Assumptions

2020 ◽  
Vol 48 (3) ◽  
pp. 340-353
Author(s):  
Rachel Moore ◽  
Brandon Pecoraro
Keyword(s):  
Fiscal Policy ◽  
General Equilibrium ◽  
Policy Change ◽  
Overlapping Generations ◽  
Budget Constraint ◽  
Economic Behavior ◽  
Ricardian Equivalence ◽  
Policy Changes ◽  
Closing Date ◽  
Projected Changes

Analysis of fiscal policy changes using general equilibrium models with forward-looking agents typically requires a counterfactual adjustment to some fiscal instrument in order to achieve the debt sustainability implied by the government’s intertemporal budget constraint. The choice of fiscal instrument can induce economic behavior unrelated to the policy change in models where Ricardian Equivalence does not hold. In this article, we use an overlapping generations framework to examine the effects of alternative fiscal closing assumptions on projected changes to economic aggregates following a change in tax policy, assessing the extent to which the bias associated with a particular fiscal instrument can be mitigated. While we find quantitative differences in projected macroeconomic activity across alternative fiscal instruments, these differences tend to shrink as the closing date is delayed. Ultimately, the choice of fiscal instrument becomes relatively unimportant if fiscal closing can be delayed sufficiently into the future.

scholarly journals Empirical Test on Impact of Monetary Policy and Fiscal Policy on Vietnam Stock Market

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
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Stock Market ◽  
Stock Price ◽  
Global Economy ◽  
Empirical Test ◽  
Fiscal Policies ◽  
Vector Error Correction ◽  
Vector Error ◽  
Exogenous Factors

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.

scholarly journals The Effects of Fiscal Policy on Economic Growth: Empirical Evidences Based on Time Series Data from Pakistan

2010 ◽  
Vol 49 (4II) ◽  
pp. 497-512 ◽  
Author(s):  
Shahid Ali ◽  
Naved Ahmad
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Time Series Data ◽  
Equivalence Theorem ◽  
Series Data ◽  
Ricardian Equivalence ◽  
Consumption Expenditures ◽  
Long Run ◽  
Optimal Fiscal Policy ◽  
Macroeconomic Impacts

Fiscal policy refers to government‟s efforts to influence the direction of the economy through changes in taxes or expenditures. Optimal fiscal policy in Pakistan and in other developing countries plays a pivotal role in growth process and, hence, serves as a vital instrument for economic growth. The efficacy of fiscal policy in improving economic conditions in the long run is, however, a controversial issue and needs further investigation. In conventional model, a federal tax cut without a corresponding reduction in federal expenditures will encourage consumption expenditures and interest earnings due to increase in personal disposable income. Contrarily, according to Ricardian Equivalence Theorem (RET), the same change in fiscal policy will not result in any of the above mentioned macroeconomic impacts. In other words, a reduction in deficit-financed federal tax cut will not affect macroeconomic outcomes [Saxton (1999)].

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