Creator: Smith, Bruce D. (Bruce David), 1954-2002 Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 237 Abstract:
A model is presented in which governments can select real expenditure levels which are feasible, hut are sufficiently high that a balanced budget is impossible. Thus governments with large expenditures are committed to inflationary finance schemes. This is the case even though the governments in question have access to lump-sum taxes. In addition, the model can explain why poorer countries tend to make heavier use of the inflation tax than do wealthier countries, and can account for the existence of country-specific fiat monies.
Stichwort: Government expenditure, Inflationary finance, Real expenditures, Inflation tax, and Deficit Fach: H62 - National Deficit; Surplus, H50 - National Government Expenditures and Related Policies: General, and E31 - Price Level; Inflation; Deflation
Creator: Dahl, David S. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 052 Beschreibung:
Second cover page indicates report dated February 12, 1976.
Stichwort: State government, Local government, Ninth district economy, and Expenditures Fach: H50 - National Government Expenditures and Related Policies: General and H72 - State and Local Budget and Expenditures
Creator: Bianchi, Javier, Ottonello, Pablo, and Presno, Ignacio Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 762 Abstract:
The excess procyclicality of fiscal policy is commonly viewed as a central malaise in emerging economies. We document that procyclicality is more pervasive in countries with higher sovereign risk and provide a model of optimal fiscal policy with nominal rigidities and endogenous sovereign default that can account for this empirical pattern. Financing a fiscal stimulus is costly for risky countries and can render countercyclical policies undesirable, even in the presence of large Keynesian stabilization gains. We also show that imposing austerity can backfire by exacerbating the exposure to default, but a well-designed "fiscal forward guidance" can help reduce the excess procyclicality.
Stichwort: Procyclicality, Fiscal stabilization policy, and Sovereign default Fach: F44 - International Business Cycles, H50 - National Government Expenditures and Related Policies: General, E62 - Fiscal Policy, F41 - Open Economy Macroeconomics, and F34 - International Lending and Debt Problems