The interdependence of Fiscal and Monetary Policies in an Emerging economy

This article's main goal is to evaluate the degree of fiscal dominance in Uruguay in 1999-2019 to improve the understanding of economic policy for theoretical reasons and applied needs related to good practices and accountability. Two strategies are followed: one, to quantify the fraction of fiscal expenditures that are financed by monetary liabilities and, the other one, to analyze the effects of fiscal deficit on the price level and inflation because inflationary financing may prevent the central bank from reaching its inflation target. Both situations may subordinate the monetary policy to the fiscal policy, signaling fiscal dominance. In addition, through the analysis performed to assess the degree of fiscal dominance, it is possible to detect the main determining factors of the Uruguayan price level (inflation) formation during the last two decades. So far, preliminary results suggest that inflation is not exclusively a monetary phenomenon and point to some inflationary financing with a mild degree of fiscal dominance.

ECONOMIC AND FISCAL CONSEQUENCES OF THE COVID-19 PANDEMIC: THE CASE STUDY OF NORTH MACEDONIA

This paper aims to analyse the impact of Covid-19 on economic and fiscal consequences in North Macedonia. In addition, the paper assesses the effects of economic and fiscal packages implemented by the Government of the country. The study uses secondary data in order to find out the real consequences caused by Covid-19 pandemic in the economy of North Macedonia. The findings reveal thatCovid-19 pandemic produced negative economic and fiscal consequences during 2020 in all sectors. Moreover at the end of 2020 the real sector of the economy recorded a 4.5% decline in GDP, the fiscal deficit achived a level of -8.1% of the GDP. The findings of the paper show that government assistance through various packages, partly affected the reduction of negative economic consequences of Covid-19.

Privatisation of Central Public Sector Enterprises in India

This paper investigates the different phases of reform state owned enterprises (SOEs) that India had been experience since the beginning of reform and analyses the policy objectives behind the policy of SOEs reforms introduced. Having evaluated the policy objectives based on various source the paper seeks to find the degree to which the objectives have been achieved and had an impact on the performance of SOEs. The paper finds three different phases of privatisation with different objectives and that the of performance of SOEs during these phases have been different. The analysis of performances of SOEs in different phases leads to questioning of the need for privatisation and speculation as to whether the actual objective behind the overall privatisation process is to generate revenue to cut the government fiscal deficit.

Political business cycle and fiscal discipline in Sub-Saharan Africa

We tested the Political Business Cycle theory in Sub-Sahara Africa. To provide an empirical explanation for this nexus, this paper used unbalanced panel data from thirty-six (36) Sub-Saharan African countries between 1990 and 2018. The system Generalized Method of Moment (GMM) developed by Arrelano-Bover/Blundell-Bond was employed to analyze the collected data. The results of the system GMM revealed that the fiscal deficit is significantly large in election years and the deficit spending spills into the year after the election, though not as high as in the election year. We could not, however, find a significant effect in the pre-election year. In addition, we found evidence suggesting that though democracy significantly lowers the fiscal deficit, it promotes higher deficit spending in the election year and the year after the election. Hence, the study established the existence of a political business cycle in Sub-Saharan African countries. The study thus recommends that sound economic policies should be put in place to reduce the persistent deficit in SSA so as to maintain sustainable fiscal health, as well as the sustainability of macroeconomics, particularly enhanced industrialization, as the study found that countries' fiscal deficits are lower in more industrialized countries in the region.

Asymmetric Effect of Fiscal Deficit on Current Account Deficit: Evidence from India

This study has attempted to re-investigate the impact of fiscal deficit (FD) on current account deficit (CAD) (also known as twin deficit hypothesis) in India from 1970–1971 to 2018–2019 in the presence of private saving–investment gap (SI) and exchange rate (EXR). For the empirical investigation, the study has employed the nonlinear autoregressive distributed lag (NARDL) approach to cointegration. The NARDL results found the evidence of an asymmetric effect of FD, SI and EXR on CAD in the long run only. The obtained results support the traditional views of the Keynesian approach that FD has a positive impact on CAD, validates the existence of the ‘Twin Deficit Hypothesis’ in India. Further, results also depict that SI has a positive effect on CAD, whereas EXR has an adverse impact on CAD. From a policy standpoint, the asymmetric impact of FD on CAD provides strong reasons for conceiving policies that are adaptable to changing dynamics in internal as well as external sectors.

Context of Latin American Protests from the Analysis in Networks

Recent protests in Latin America demand attention. Citizens made demands due to the impact of anti-popular measures, the discontent of popular sectors due to the weight of the crisis in their economy in times of pandemic, corruption, inequality and inequities and the fiscal deficit. In this process, the streets have been witness to the voice and the action of protestors.

CURRENT TREND IN THE FISCAL DEFICIT OF THE UNION BUDGET IN INDIA

The present study analyze the fiscal deficit as an instrument to measure the amount of government borrowing to require the financial position and their budget shortfall. This study traces the major current changes in Indian fiscal system during the period 2019-20, though the unions Government adopt the fiscal rule for reduction the financial crisis during the epidemic period of Covid-19. However the current study also traces the percentage of GDP decrease because of the problem of lock-down during the Covid-19. The paper concludes with discussion on the composition of union government receipts and expenditure position in present scenario and indicated the situation of fiscal and revenue deficit of the government budget.

Optimistic Mexico budget maintains fiscal tightness

Significance It contains the federal budget and revenue legislation, as well as key macroeconomic domestic and international assumptions and projections, several of which look highly optimistic. Impacts Banxico will probably increase interest rates further due to relatively high inflation levels. Tight fiscal and monetary conditions will probably arrest short-term growth. The peso-dollar exchange rate should remain broadly stable as the fiscal accounts present manageable deficits in 2021-22. The current account is expected to show a small surplus during 2021 as a whole, and a marginal deficit next year. Legislators may raise the expected oil price for 2022 to boost spending in some areas without increasing the fiscal deficit target.

Is the Fiscal Deficit of ASEAN Alarming? Evidence from Fiscal Deficit Consequences and Contribution towards Sustainable Economic Growth

The Association of Southeast Asian Nations (ASEAN) has faced a persistent fiscal deficit for the last three decades. In the vast literature, a question is still arising: is ASEAN’s fiscal deficit alarming? This study explores the fiscal deficit with different perspectives to provide guidelines for policymakers to answer this question. For this purpose, we offer fiscal causal hypotheses estimates, including the contribution of Government expenditures (GEs) and Government revenues (GRs) towards sustainable economic growth; we then evaluated two additional deficit hypotheses, the impact of fiscal deficit and deficit financing on inflation. This empirical analysis covered annual financial data for the years 1990 to 2019 of ten member countries of ASEAN by applying panel econometric techniques, which include unit root Levin, Lin, and Chu (LLC) and Im, Pesaran, and Shin (IPS) tests; the panel autoregressive distributed lag (ARDL) model for cointegration; and the Dumitrescu–Hurlin (DH) test for causality. The findings revealed that government expenditures contribute more towards sustainable economic growth while government revenues are inversely related to growth in the long run. The DH causality test supported the fiscal synchronization hypothesis and current account targeting hypothesis in ASEAN. The interest rate is found as a moderator between fiscal and current account deficits. Furthermore, the findings showed that the fiscal deficit of ASEAN could generate inflation while relying on outstanding debt. Overall, our findings concluded that the fiscal deficit of ASEAN is alarming based on the behavior of government revenues, interest rate dynamics, political stability, and outstanding debt in deficit financing.