frictions fiscal policy and aggregate volatility

... unemployment benefits rise and receipts from VAT and income tax fall 22.6 Limits on active fiscal policy Why can’t shocks to aggregate demand immediately be offset by fiscal policy?  Time lags: it ... is not known aggregate demand is always changing Induced effects on autonomous demand – changes in fiscal policy may induce offsetting effects in other components of aggregate demand 22.7 Limits ... effects in other components of aggregate demand 22.7 Limits on active fiscal policy (2) Why doesn’t the government expand fiscal policy when unemployment is persistently high?  The budget deficit...

Ngày tải lên: 03/02/2015, 15:21

... Aggregate Demand Many factors influence aggregate demand besides monetary and fiscal policy In particular, desired spending by households and business firms determines the overall demand ... Harcourt, Inc How Fiscal Policy Influences Aggregate Demand Fiscal policy refers to the government’s choices regarding the overall level of government purchases or taxes Fiscal policy influences ... Fiscal policy influences saving, investment, and growth in the long run In the short run, fiscal policy primarily affects the aggregate demand Fiscal policy can be used to alter government purchases...

Ngày tải lên: 03/06/2016, 11:39

... Helbling, and A Mazarei, 1997, Fiscal Policy and Growth in the Middle East and North Africa Region,” IMF Working Paper No 97/101 (Washington, DC: International Monetary Fund) Engle, R and C Granger, ... 1987, "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Vol 55, pp 251- 276 Fasano, U., and Q Wang, 2001, Fiscal Expenditure Policy and Non-Oil Economic ... Baldacci, and C Mulas-Granados, 2005, Fiscal Policy, Expenditure Composition, and Growth in Low-Income Countries,” Journal of International Money and Finance, Vol 24, pp 441-463 Haque, M., and D...

Ngày tải lên: 10/04/2014, 23:56

... rates and fiscal policy shocks will affect the level of economic activity We use the model to quantitatively evaluate the role played by financial frictions, procyclical fiscal policy, and various ... pressures and temptations to keep spending high and run fiscal deficits Lastly, delays in the implementation and execution of fiscal policies in developing economies also contribute to fiscal policy ... financial frictions and fiscal policy to the business cycles of the OECS countries by means of several numerical experiments In our first experiment we assume that both fiscal policy and country...

Ngày tải lên: 23/04/2016, 04:50

... increase in aggregate demand cause aggregate output to rise • A higher level of aggregate output increases the demand for money Response to a Change in Fiscal Policy II • The excess demand for money ... less interest-sensitive money demand is, the more effective monetary policy is relative to fiscal policy Effectiveness of Monetary and Fiscal Policy When the Demand for Money is Unaffected by the ... unemployment? • In practice, fiscal and monetary policies are used together in the combination known as the policy mix The Policy Mix and German Unification Monetary versus Fiscal Policy • Complete crowding...

Ngày tải lên: 05/01/2014, 17:00

... loan-to-value ratio (implying looser lending standards) reduces the volatility of aggregate consumption and aggregate labor hours but it signicantly magnies the volatility of household debt A natural ... Gilchrist, S and J.V Leahy 2002 Monetary policy and asset prices, Journal of Monetary Economics 49, 75-97 Gilchrist, S and M Saito 2008 Expectations, asset prices, and monetary policy: The role ... plans, and realizations in theory and practice, Econometrica 51, 1251-1279 Orphanides, A and J.C Williams 2005 Imperfect knowledge, ination expectations, and monetary policy, in B Bernanke and M...

Ngày tải lên: 06/03/2014, 08:20

... bound and the role of the exchange rate for monetary policy in Japan” by G Coenen and V Wieland, March 2003 219 “Extra-euro area manufacturing import prices and exchange rate pass-through” by B Anderton, ... international monetary policy cooperation” by G Benigno and P Benigno, October 2003 280 “Inflation, factor substitution and growth” by R Klump, October 2003 281 “Identifying fiscal shocks and policy regimes ... (“type 1” fiscal events), or as announcements of policy targets and discussions on the European institutional framework (“type 2” fiscal events) The relation of some of these selected fiscal events...

Ngày tải lên: 22/03/2014, 23:20

... 13 2.2.1 Sovereign Default and Emerging Market Business Cycles 13 2.2.2 Fiscal Policy in Developing Countries 16 Fiscal Policy Volatility and Default 3.1 23 23 3.1.1 Firms ... other work, Neumeyer and Perri (2005) and Aguiar and Gopinath (2007) find that, on average the volatility of output is twice, volatility of consumption relative to output and volatility of real ... begin by providing a description and analysis of fiscal policy aggregates and document the differences in fiscal policy actions and their outcomes between developing and developed economies I also...

Ngày tải lên: 01/06/2014, 14:00

... consumption CC function to CC , and leads to higher investment at I1 Aggregate demand rises Y1 Income to AD1, and the new equilibrium is at Y1 25.11 Aggregate demand Fiscal policy and crowding out 45o line ... of aggregate demand Demand management is the use of monetary and fiscal policy to stabilize the level of income around a high average level r LM1 Income level Y* can be attained by: ‘Tight’ fiscal ... demand 25.9 Interest rates and aggregate demand  The position of the AD schedule is now seen to depend upon interest rates through the effects on – consumption – investment 25.10 Monetary policy...

Ngày tải lên: 03/02/2015, 15:28

... sustainable fiscal policy needs to maintain the debt ratio at its current level For Pasinetti (1998) and Goldstein (2003), a sustainable fiscal policy is the one Cuddington (1997) and Chalk and Hemming ... Government Fiscal Balance and Debt Stock (US$ Billions) However, from the mid 1970s, the federal fiscal policy operations show a dramatic change giving rise to fiscal deficits and increasing debt and ... stationarity of St* In the second and third tests Hamilton and Flavin assumed adaptive and partial-rational expectations respectively and regressed Dt on (1 + r )t and current and lagged values of St ...

Ngày tải lên: 12/09/2015, 10:52

... (L), and bonds (B), and fmances itself with deposits (D) and CDs (C) The bank seeks to maximize: (1) Max rLL + r8B - rC, where rL, r, and rc represent the interest rates on loans, bonds, and CDs ... patterns between shifts in policy and changes in lending and output Unfortunately, the observation that changes in monetary policy are followed by changes in both loan quantities and economic activity ... monetary policy operates through standard interest channels to depress economic activity and to reduce the demand for credit Consequently, there can be an induced correlation between activity and...

Ngày tải lên: 06/09/2013, 05:46

... Conclusions and Recommendations 18 CPIA 20 Debt Thresholds and Indicators 21 Annexes Debt Indicators 23 Country Performance Ratings for 2003 25 List of References 32 ABBREVIATIONS CPIA Country Policy and ... of public and publicly guaranteed external debt to gross domestic product and to exports, and debt service on the same debt to exports to judge debt sustainability Country policies and institutional ... on the basis of the Performance Based Allocation System that uses the Country Policy and Institutional Assessment and governance rating of the country concerned The increase in grants has implications...

Ngày tải lên: 28/10/2013, 08:15

... Juniper® and Cisco Routing Policy and Protocols for Multivendor IP Networks Juniper® and Cisco Routing  Policy and Protocols for Multivendor IP Networks Walter ... important role of routing protocols and routing policies in today’s Internet be understood Talk of peers and aggregate summaries and backbones and access points and points of presence (POPs) make ... Configuration L1_only3A and L1_only3B Configuration Viewing the Routing Table and Link-State Database L1/L2_3to1 Routing Table and Link-State Database L1_only3A and L1_only3B Routing Table and Link-State...

Ngày tải lên: 06/11/2013, 00:15

... balance and payments and budgets, the mix of loans and grants in its future financing arrangements, and the build-up of its repayment capacity relative to Gross Domestic Product (GDP) and export and ... Countries: Proposal for an Operational Framework and Policy Implications by Mark Allen and Gobind Nankani, IMF and IDA, February 3, 2004 Debt Sustainability and Financing Terms in IDA 14, IDA, June 2004 ... discussed above and in Annex These were the PV of public and publicly guaranteed external debt to GDP, exports, and government revenue, and debt service on the same debt to exports, and government...

Ngày tải lên: 06/11/2013, 23:15

... policies and institutional capability and vulnerability to shocks are other factors identified as being important for assessing a country’s debt sustainability In particular, country policies and ... judged by the absolute amount or PV of debt outstanding as a ratio with GDP, exports or government revenue The second is a weak institutional and policy environment in the country which makes it ... debt distress and the debt thresholds for the chosen indicators are policy decisions that need to be made Footnote 19 in “Debt Sustainability in Low Income Countries” by Mark Allen and Gobind Nankani,...

Ngày tải lên: 06/11/2013, 23:15

... criteria used and the CPIA for 2003 • Economic management, including management of inflation and the current account; fiscal policy; management of external debt; and management and sustainability ... resources, safety nets; and poverty monitoring and analysis; and • Public sector management and institutions, including property rights and rule-based governance; quality of budgetary and financial management; ... including trade policy and foreign exchange regime; financial stability and depth; banking sector efficiency and resource mobilization; competitive environment for the private sector; factor and product...

Ngày tải lên: 06/11/2013, 23:15

... considerations raise questions of why countries with similar institutional and policy performance as judged by the CPIA and similar per capita income levels receive IDA allocations on different ... allocations thereby weakening the desired relationship between institutional capability and policy performance and the allocation of funds In view of this, IDA management has proposed an upfront ... charges and commitment fees) materialize and upfront charges for grants are levied (to replace foregone principal reflows) it would reduce the need to harden the credit terms for both IDA only and...

Ngày tải lên: 13/12/2013, 22:15

... considerations raise questions of why countries with similar institutional and policy performance as judged by the CPIA and similar per capita income levels receive IDA allocations on different ... allocations thereby weakening the desired relationship between institutional capability and policy performance and the allocation of funds In view of this, IDA management has proposed an upfront ... charges and commitment fees) materialize and upfront charges for grants are levied (to replace foregone principal reflows) it would reduce the need to harden the credit terms for both IDA only and...

Ngày tải lên: 13/12/2013, 22:15

... experience and little applied knowledge (e.g., institutional development, gender equality, and labor-intensive growth) The United Nations has a stronger mandate to work in the political arena and assess ... stock and flow problems in formulating an appropriate borrowing strategy A high current debt service ratio combined with a low level of debt stock needs to be handled as a liquidity problem and ... lending and grants Given the importance of DSAs for each low income country in the application of the DSF and borrowing from the IMF, it is necessary that these be conducted in a collaborative and...

Ngày tải lên: 13/12/2013, 22:15

... credits and grants to low-income countries in ways that foster debt sustainability and achievement of the MDGs Recommendations also seek to address the need for borrowers to claim sufficient policy ... ratings and the inputs expected from and the involvement of national staff in the process There should be opportunities for the Bank to present their findings both to the country concerned and donor ... DSAs and consequently of government revenue in determining debt indicators and their threshold values Similarly, it is also recommended that studies be conducted on determining indicators and...

Ngày tải lên: 13/12/2013, 22:15