Read Deficit Limits, Budget Rules and Fiscal Policy

Deficit Limits, Budget Rules and Fiscal Policy

Paolo Manasse

4.9/5 (15771 ratings)

Description:The paper presents a simple model for discussing the effects of deficit limits and budget rules on fiscal policy. I find that limits on deficit-output ratios provide incentives to implement procyclical policies when the economy is in intermediate states, and countercyclical policies only in very "good" and very "bad" economic times. As a result, fiscal "reaction functions" are not monotonically related to the state of the economy. Deficit limits are found to exert discipline only provided the limit is tight and the expected sanction large, albeit at a relatively large welfare cost. Moreover, when fiscal choices are made under a veil of ignorance about the output gap, an increase in volatility is likely to raise the level of the budget deficit. Finally, concerning the design of fiscal frameworks, when excessive deficits arise from a political bias, deficit limits should be symmetric and not state-contingent.We have made it easy for you to find a PDF Ebooks without any digging. And by having access to our ebooks online or by storing it on your computer, you have convenient answers with Deficit Limits, Budget Rules and Fiscal Policy. To get started finding Deficit Limits, Budget Rules and Fiscal Policy, you are right to find our website which has a comprehensive collection of manuals listed.
Our library is the biggest of these that have literally hundreds of thousands of different products represented.

Pages: 21

Format: PDF, EPUB & Kindle Edition

Publisher: Not Avail

Release: 2005

ISBN: 661382531X

Description: The paper presents a simple model for discussing the effects of deficit limits and budget rules on fiscal policy. I find that limits on deficit-output ratios provide incentives to implement procyclical policies when the economy is in intermediate states, and countercyclical policies only in very "good" and very "bad" economic times. As a result, fiscal "reaction functions" are not monotonically related to the state of the economy. Deficit limits are found to exert discipline only provided the limit is tight and the expected sanction large, albeit at a relatively large welfare cost. Moreover, when fiscal choices are made under a veil of ignorance about the output gap, an increase in volatility is likely to raise the level of the budget deficit. Finally, concerning the design of fiscal frameworks, when excessive deficits arise from a political bias, deficit limits should be symmetric and not state-contingent.We have made it easy for you to find a PDF Ebooks without any digging. And by having access to our ebooks online or by storing it on your computer, you have convenient answers with Deficit Limits, Budget Rules and Fiscal Policy. To get started finding Deficit Limits, Budget Rules and Fiscal Policy, you are right to find our website which has a comprehensive collection of manuals listed.
Our library is the biggest of these that have literally hundreds of thousands of different products represented.

Special Offer | $0.00

Special Offer! | $0.00

Deficit Limits, Budget Rules and Fiscal Policy

Deficit Limits, Budget Rules and Fiscal Policy

More Books

Predicting Sovereign Debt Crises

Predicting Sovereign Debt Crises

Rules of Thumb for Sovereign Debt Crises

Rules of Thumb for Sovereign Debt Crises

Procyclical Fiscal Policy: Shocks, Rules, and Institutions - A View from Mars

Procyclical Fiscal Policy: Shocks, Rules, and Institutions - A View from Mars

Economic Crisis and Structural Reforms in Southern Europe: Policy Lessons (Routledge Studies in the European Economy)

Economic Crisis and Structural Reforms in Southern Europe: Policy Lessons (Routledge Studies in the European Economy)

Trade, Wages and Superstars.

Trade, Wages and Superstars.

Studio dell'efficienza di trigger dell'apparato KM2A dell'esp. LHAASO: Le nuove prospettive della Fisica Astroparticellare (Italian Edition)

Studio dell'efficienza di trigger dell'apparato KM2A dell'esp. LHAASO: Le nuove prospettive della Fisica Astroparticellare (Italian Edition)