stabilization policy
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2022 ◽  
Vol 32 (1) ◽  
pp. 5-20
Author(s):  
Jan L. Bednarczyk

Purpose: The article attempts to systematize the strategies undertaken by individual countries (groups of countries) after the 2007+ crisis with regard to stabilizing prices and supporting economic recovery. It is about highlighting the strengths and weaknesses of particular types of strategies as well as opportunities and threats related to their implementation. Methodology: In the theoretical analysis, three types of economies were distinguished, using as a criterion the orientation of a given economy towards securing price stability or supporting economic recovery. The classical dynamized AD-AS model, commonly used in macroeconomics, and the SWOT analysis were used as a research tool. Findings: The basis for differences in the approach of economic authorities of individual countries to the problem of stabilizing prices or supporting economic recovery is the mandate of the central bank. Depending on the type of strategy implemented by the central bank, individual countries and groups of countries react diametrically to exogenous shocks, which results in different results in terms of economic growth and employment. Practical Implications: The results can be utilized by central authorities (central banks) in formulating assumptions and forecasts of monetary policy. Originality / Value: The paper contains an  original division of countries / groups of countries due to their orientation in the field of medium-term stabilization policy. The analyzes of these countries are also original, having no equivalent in the world literature on this subject.


2021 ◽  
Vol 67 (2) ◽  
pp. 1-9
Author(s):  
Vladimir Mihajlović ◽  
Gordana Marjanović

Abstract The trade-off between output and unemployment has become an essential part of modern macroeconomics and is known as Okun’s law. However, in transition and emerging markets economies’ context, the output-employment nexus has a much more important role as these countries strive to significantly improve the growth dynamics of both variables. This paper aims to analyze the particularities of this relationship in selected Central- and South-Eastern European transition (and former transition) countries to find out a discrepancy between the output and employment growth. Therefore, the employment elasticity coefficients are calculated. The estimated results suggest that, in the observed period, economic growth has not contributed to satisfactory employment growth, which is commonly referred to as a “jobless growth” hypothesis. Accordingly, this paper attempts to single out the main challenges of the output-employment growth misbalance in these countries and propose adequate policy measures that could reduce it. The industrial policy that differentiates from the “one-size-fits-all” paradigm is emphasized as the most important part of macroeconomic policy in transition economies to make their development more balanced. Additionally, short-run stabilization policy, especially the one focused on the labour market, has a significant role in these economies.


2021 ◽  
Vol 35 (2) ◽  
pp. 77-100
Author(s):  
Florin Bilbiie ◽  
Tommaso Monacelli ◽  
Roberto Perotti

We discuss the main fiscal policy issues in Europe, focusing on two that are at the core of the current debate. The first is that the government deficit and debt were, from the outset, the key objects of contention in the debate that led to the creation of the Eurozone, and they still are. The second issue is that a currency union implies the loss of a country-specific instrument, a national monetary policy. This puts a higher burden on fiscal policy as a tool to counteract shocks, a burden that might be even heavier now that the European Central Bank has arguably reached the Zero Lower Bound. Two obvious solutions are mutual insurance (or risk-sharing) amongst countries and a centralized stabilization policy. Yet both have been remarkably difficult to come by, especially due to political constraints. We review and discuss the relative merits of several proposals for increased insurance or centralization, or both. We conclude with an early discussion of the implications of the COVID-19 crisis for European fiscal policy reform and an assessment of the current fiscal measures.


Author(s):  
Emmanuel Abokyi ◽  
Dirk Strijker ◽  
Kofi Fred Asiedu ◽  
Michiel N. Daams

AbstractThis study investigates the possible causal relationship between buffer stock operations in Ghanaian agriculture and the well-being of smallholder farmers in a developing world setting. We analyze the differences in the objective and subjective well-being of smallholder farmers who do or do not participate in a buffer stock price stabilization policy initiative, using self-reported assessments of 507 farmers. We adopt a two-stage least square instrumental variable estimation to account for possible endogeneity. Our results provide evidence that participation in buffer stock operations improves the objective and subjective well-being of smallholder farmers by 20% and 15%, respectively. Also, with estimated coefficient of 1.033, we find a significant and robust relationship between objective well-being and subjective well-being among smallholder farmers. This relationship implies that improving objective well-being enhances the subjective well-being of the farmers. We also find that the activities of intermediaries decrease both the objective and subjective well-being of farmers. This study demonstrates that economic, social, and environmental aspects of agricultural life could constitute priorities for public policy in improving well-being, given their strong correlation with the well-being of farmers. Based on the results of this study, we provide a better understanding, which may aid policy-makers, that public buffer stockholding operations policy is a viable tool for improving the well-being of smallholder farmers in a developing country.


2021 ◽  
pp. 93-98
Author(s):  
A. Ya. Zaporozhan

The article is devoted to consideration of two directions of state economic policy — maintaining economic stability and ensuring economic growth. The coronavirus pandemic has divided the world into “before and after”. In the previous period, the financial policy in Russia was based on the principle of macroeconomic stability. It would seem that the macroeconomic stability that has existed for several years has created the basis for economic growth in the country, but it has not been possible to realize the growth potential of the Russian economy. Economic stability is an important criterion for the economy. Only economic stability can be different.The economic stability of the Russian economy in the previous period is the economic stability of stagnation, because the cornerstone of the economic stabilization policy was maintaining a low inflation rate by artificially slowing down demand. N ow this economic stability of stagnation was overturned by the coronavirus epidemic due to a decrease in budget revenues and an increase in budget spending, which results in the threat of inflation.The purpose of the article is to substantiate the necessity and possibility of transition to a new form of economic stability — economic growth stability


Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-13
Author(s):  
Xiaorui Xie ◽  
Ye-Hwa Chen

The stabilization problem of a macroeconomic dynamical system is considered in this paper. The main features of this system are that the system uncertainties may be unknown functions of state and time but with known bounds. Furthermore, the control inputs are subject to constraints, which is a salient feature in an economic control problem. To ensure that the controls are within the specified boundaries, in our control design procedure, a creative diffeomorphism, which converts bounded controls into unbounded corresponding signals by choosing an appropriate transformation function, is proposed. For the uncertain system, a deterministic robust control is designed to render the practical stability: uniform boundedness and uniform ultimate boundedness. The range of the input bounds is related to the uncertainties and can be designed according to the actual situation. Numerical simulations are performed to verify the effectiveness of the stabilization policy.


2021 ◽  
Vol 129 ◽  
pp. 01015
Author(s):  
Tatiana Kotcofana ◽  
Anastasiya Titova ◽  
Armen Altunyan

Research background: In 2020, all the world's economies faced a new, special phenomenon – the coronacrisis caused by the pandemic, and with the fall of most economic indicators. In the current conditions, it is extremely important to build a competent monetary policy in order to soften the "blows" caused by the global recession for national economies. Purpose of the article: The main purpose of the presented article is the analysis of measures to stimulate the economy using monetary policy instruments in the conditions of the coronacrisis. Methods: To conduct the study, we used official statistics data, on the basis of which an econometric model was built, which allowed us to determine the forecast values for inflation, taking into account the impact of monetary and non-monetary factors. Findings & Value added: The econometric analysis show the high importance of non-monetary factors of inflation. This makes it difficult to assess the monetary policy, since Central banks are able to influence non-monetary factors only indirectly. The paper notes the influence of the refinancing rate on loans to the real sector of the economy, since the stabilization monetary policy should be primarily aimed at maintaining economic growth. The correlation field of the relationship between the index of rigidity of restrictions developed by the University of Oxford and loans to small and medium-sized businesses is constructed. It is noted that with the reduction of administrative restrictions, the volume of loans granted to small and medium-sized businesses increases.


2021 ◽  
Vol 16 (2) ◽  
pp. 677-716
Author(s):  
Olivier Loisel

In locally linearized dynamic stochastic rational‐expectations models, I introduce the concepts of feasible paths (paths on which the policy instrument can be expressed as a function of the policymaker's observation set) and implementable paths (paths that can be obtained, in a minimally robust way, as the unique local equilibrium under a policy‐instrument rule consistent with the policymaker's observation set). I show that, for relevant observation sets, the optimal feasible path under monetary policy can be non‐implementable in the new Keynesian model, while constant‐debt feasible paths under tax policy are always implementable in the real business cycle model. The first result sounds a note of caution about one of the main lessons of the new Keynesian literature, namely the importance for central banks to track some key unobserved exogenous rates of interest, while the second result restores to some extent the role of income or labor‐income taxes in safely stabilizing public debt. For any given implementable path, I show how to design arithmetically a policy‐instrument rule consistent with the policymaker's observation set and implementing this path as the robustly unique local equilibrium.


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