The Experts below are selected from a list of 312 Experts worldwide ranked by ideXlab platform
Yilin Hou - One of the best experts on this subject based on the ideXlab platform.
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a rule based time consistent path of debt use for subnational governments debt as a Countercyclical Fiscal Policy tool
2013Co-Authors: Yilin HouAbstract:This paper formulates a model of Countercyclical use of long-term full faith and credit debt by subnational governments to finance infrastructure. The model incorporates long-term debt into budgetary Policy, considering debt capacity, purposes and security of debt, and equity. The proposition is to retire debt in boom years to preserve debt capacity and reduce borrowing costs, and then incur more debt at a lower interest rate in bust years to help maintain service provision and pave the way for recovery. I conduct time series and panel data tests to answer: do subnational governments use debt Countercyclically? What determines the cyclical patterns in subnational use of debt? Will Countercyclical debt issue and retirement be applicable? Results using US states data show that overall, US states do not tend to use debt against the economic cycle; however, I obtain evidence that at least some states adopted Countercyclical debt policies. Finally, I simulate the effects of the proposed optimal debt Policy with New York State. Calibration shows that such a Policy could have rendered the state a much better situation to encounter the Great Recession. Findings and results of this study provide timely insight into this important issue to scholars and Policy makers.
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Countercyclical Fiscal Policy and Multiyear Perspective on Budgeting
State Government Budget Stabilization, 2012Co-Authors: Yilin HouAbstract:This chapter offers a theoretical exploration towards a new budgetary system to cope with uncertainty and instability. It begins by examining the practice of annual balance, core of the “modern” budgetary theory, and infers that annual budget creates a mismatch between the budget cycle and the continuity of public service provision. The chapter provides multi-year perspective on budgeting as a potential solution, with counter-cyclical Fiscal reserves as the means to balance the budget through and across economic cycles. The chapter suggests that states have tried a multi-year perspective by adopting budget stabilization funds (BSF) and shifting annual surpluses from the general fund into BSF. By creating BSF legislation, states institutionalize the counter-cyclical Fiscal Policy. Then with sufficient Fiscal reserves, states can better maintain trend-level public services during recessions. Through panel data (1979–1999) analysis, the chapter provides empirical evidence that BSF did help stabilize state general expenditure in downturns by releasing reserves to fill in spending gaps. Specifically, states that had established a BSF before the three sampled recessions fared better than those that did not; states that established a BSF earlier had better weathered the recessions than those that adopted the fund late. In other words, adopting the counter-cyclical Fiscal Policy and BSF is a step in moving public budgeting from the annual to a longer-term perspective, which indicates progress towards building a new budgetary system for Fiscal stability over the economic cycle.
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Budgeting for Fiscal Stability over the Business Cycle: A Countercyclical Fiscal Policy and the Multiyear Perspective on Budgeting
Public Administration Review, 2006Co-Authors: Yilin HouAbstract:This essay is a theoretical exploration of a new budgetary system to cope with Fiscal uncertainty and instability.1It examines policies requiring positive year-end balances and infers that annual budget cycles lead to a mismatch between the budget cycle and the continuity of public service provision. The author considers a multiyear perspective on budgeting as a potential solution, with Countercyclical Fiscal reserves to help ensure stability during fluctuating economic conditions. By adopting budget stabilization funds and keeping sufficient reserves, states can better maintain trend-level public services during recessions. Panel data analysis provides empirical evidence that such funds helped stabilize state general expenditures during downturns. The adoption of Countercyclical Fiscal Policy and budget stabilization funds is a step toward a longer-term perspective on budgeting, thus promoting Fiscal stability over the economic cycle.
Atilim Seymen - One of the best experts on this subject based on the ideXlab platform.
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the effects of Countercyclical Fiscal Policy firm level evidence from temporary consumption tax cuts in turkey
VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order, 2013Co-Authors: Atilim Seymen, Florian MischAbstract:The paper investigates the effects of temporary consumption tax cuts using firm-level data. As part of its Countercyclical measures implemented during the recent global economic crisis, Tur-key temporarily lowered consumption taxes on selected durables. Our empirical strategy ex-ploits variation in firm exposure to the tax cut which allows us to control for unobserved indus-try- and region-specific shocks to address potential endogeneity. Using data on the change of sales of firms that benefited from this measure and of those that did not over different periods, we find positive and robust effects of consumption tax cuts on the change of firm sales which is consistent with theoretical predictions.
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The effects of Countercyclical Fiscal Policy: Firm-level evidence from temporary consumption tax cuts in Turkey
2012Co-Authors: Florian Misch, Atilim SeymenAbstract:The paper investigates the effects of temporary consumption tax cuts using firm-level data. As part of its Countercyclical measures implemented during the recent global economic crisis, Turkey temporarily lowered consumption taxes on selected durables. Using data on the change of sales of firms that benefited from this measure and of those that did not over different periods, we perform a difference-in-difference analysis where we also control for various unobservable effects including sector-specific shocks to address potential endogeneity. We find positive and robust effects of consumption tax cuts on the change of firm sales which is consistent with theoretical predictions.
Florian Misch - One of the best experts on this subject based on the ideXlab platform.
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the effects of Countercyclical Fiscal Policy firm level evidence from temporary consumption tax cuts in turkey
VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order, 2013Co-Authors: Atilim Seymen, Florian MischAbstract:The paper investigates the effects of temporary consumption tax cuts using firm-level data. As part of its Countercyclical measures implemented during the recent global economic crisis, Tur-key temporarily lowered consumption taxes on selected durables. Our empirical strategy ex-ploits variation in firm exposure to the tax cut which allows us to control for unobserved indus-try- and region-specific shocks to address potential endogeneity. Using data on the change of sales of firms that benefited from this measure and of those that did not over different periods, we find positive and robust effects of consumption tax cuts on the change of firm sales which is consistent with theoretical predictions.
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The effects of Countercyclical Fiscal Policy: Firm-level evidence from temporary consumption tax cuts in Turkey
2012Co-Authors: Florian Misch, Atilim SeymenAbstract:The paper investigates the effects of temporary consumption tax cuts using firm-level data. As part of its Countercyclical measures implemented during the recent global economic crisis, Turkey temporarily lowered consumption taxes on selected durables. Using data on the change of sales of firms that benefited from this measure and of those that did not over different periods, we perform a difference-in-difference analysis where we also control for various unobservable effects including sector-specific shocks to address potential endogeneity. We find positive and robust effects of consumption tax cuts on the change of firm sales which is consistent with theoretical predictions.
Joseph J. Minarik - One of the best experts on this subject based on the ideXlab platform.
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Countercyclical Fiscal Policy: In Theory, and in Congress
National Tax Journal, 1991Co-Authors: Joseph J. MinarikAbstract:Describes the economic Policymaking process in Congress, with particular reference to the current recession. Attempts to distinguish between how Policy would be made in an ideal world, and how it is made in the world in which we live.
Peter J. Montiel - One of the best experts on this subject based on the ideXlab platform.
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THE GREAT RECESSION, “RAINY DAY” FUNDS, AND Countercyclical Fiscal Policy IN LATIN AMERICA
Contemporary Economic Policy, 2010Co-Authors: Eduardo Fernández-arias, Peter J. MontielAbstract:I. INTRODUCTION The current financial crisis has been the most severe and widespread that the international economy has experienced since the Great Depression of the 1930s. Although it originated in the United States, the crisis spread internationally very quickly. Developing countries in particular were affected through various channels, both financial and real. The financial channels include sharp contractions in domestic asset prices and capital outflows, while the real channels include reductions in export volumes, declines in the prices of primary commodities, and reduced flows of workers' remittances. The worldwide nature of the crisis has generated a debate both in each affected nation and in all the major international financial organizations about the appropriate nature of the Policy response. The complicating factors in addressing this issue are that the crisis manifested itself in different forms in different countries, that the effectiveness of the Policy instruments available to confront it is likely to differ country by country, that each country faces country-specific constraints and tradeoffs in deploying such Policy instruments, and that countries differ in the weights that they place on different Policy objectives. Not surprisingly, therefore, there has been much international disagreement about appropriate Policy responses, and individual countries have implemented quite different policies. This article considers the challenge of crisis Policy from the perspective of Latin America, Its particular concern is with the appropriate role for Countercyclical Fiscal Policy in response to the crisis. This issue was hotly debated within the region in the early stages of the crisis, and prominent voices argued for Fiscal restraint, for reasons similar to those used to justify Fiscal restraint more recently in many countries outside the region--that is, to safeguard market confidence. In the event, breaking with the past, countries in Latin America indeed undertook moderate Fiscal stimulus. Instead of engineering Fiscal restraint, Fiscal balances in 2009 were allowed to accommodate the downturn in almost every country in the region. (1) In the typical country, the primary Fiscal balance in 2009 deteriorated with respect to 2008 by 2.4 points of gross domestic product (GDP), 1.4 points because of lower Fiscal revenues, and 1 point on account of higher expenditures. Countercyclical Fiscal Policy was behind not only spending expansion but, in part, revenue contraction because of lowering taxes. This impulse is planned to continue to some extent over 2010. Recovery is currently under way in Latin America. Because there were other forces driving that recovery, however (such as fast-growing demand for the region's primary products from booming economies in Asia), the contribution of Fiscal stimulus to the region's recovery remains to be established. However, the question remains: was Countercyclical Fiscal Policy an ex ante mistake that proved to be less harmful ex post because of fortunate developments in trade with Asia? Or have at least some economies in the region evolved to the point where a Countercyclical Fiscal stance--which indeed represents a significant break from the region's past--was appropriate ex ante in light of the severity of the crisis? The question is an important one, because it speaks to the crucial issue of whether, after two decades of reform, the region's macroeconomic institutions and circumstances have placed it in a position to be able to actively pursue macroeconomic stability in response to external shocks, rather than exercise restraint for the sake of preserving market confidence. In the event that the current recovery turns out not to be sustained or that an independent new crisis appears on the horizon in the near future, the formulation of an appropriate Policy response requires that this question be addressed. Because theory suggests that the answer is likely to depend on country-specific conditions, we illustrate some of the important factors to be considered by focusing on the case of the seven largest economies in the region (the Latin American and Caribbean [LAC]-7 countries, consisting of Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela). …
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The Great Recession, 'Rainy Day' Funds, and Countercyclical Fiscal Policy in Latin America
2010Co-Authors: Eduardo Fernández-arias, Peter J. MontielAbstract:This paper examines the Fiscal Policy options that were available to Latin American countries at the onset of the current global economic crisis. It concludes that most of the major countries in the region possessed the Fiscal space (as measured by credible Fiscal sustainability and debt headroom) to run prudent Countercyclical Fiscal deficits. For those countries, the appropriate Policy response involved a constrained Fiscal expansion focused on productive public spending and financed by drawing on the "rainy day" funds - in the form of large stocks of foreign exchange reserves - that they accumulated in prior years, rather than by market borrowing. It shows that the recent surge in multilateral financial activity to alleviate market illiquidity, whether intended for reserve or budget support, strengthens the case for this Policy prescription : with multilateral support, the appropriate Policy response is more expansionary, and its financing is less reliant on market borrowing.
