Author: Alan J. AuerbachPublisher:
ISBN:
Category :
Languages : en
Pages : 196
Book Description
Dynamic Fiscal Policy
Author: Alan J. AuerbachOptimal Dynamic Fiscal Policy when There is a Fiscal Gap
Author: Georg HirteOptimal Dynamic Fiscal Policy
Author: Aleh TsyvinskiThe New Dynamic Public Finance
Author: Narayana R. KocherlakotaPublisher: Princeton University Press
ISBN: 1400835275
Category : Business & Economics
Languages : en
Pages : 230
Book Description
Optimal tax design attempts to resolve a well-known trade-off: namely, that high taxes are bad insofar as they discourage people from working, but good to the degree that, by redistributing wealth, they help insure people against productivity shocks. Until recently, however, economic research on this question either ignored people's uncertainty about their future productivities or imposed strong and unrealistic functional form restrictions on taxes. In response to these problems, the new dynamic public finance was developed to study the design of optimal taxes given only minimal restrictions on the set of possible tax instruments, and on the nature of shocks affecting people in the economy. In this book, Narayana Kocherlakota surveys and discusses this exciting new approach to public finance. An important book for advanced PhD courses in public finance and macroeconomics, The New Dynamic Public Finance provides a formal connection between the problem of dynamic optimal taxation and dynamic principal-agent contracting theory. This connection means that the properties of solutions to principal-agent problems can be used to determine the properties of optimal tax systems. The book shows that such optimal tax systems necessarily involve asset income taxes, which may depend in sophisticated ways on current and past labor incomes. It also addresses the implications of this new approach for qualitative properties of optimal monetary policy, optimal government debt policy, and optimal bequest taxes. In addition, the book describes computational methods for approximate calculation of optimal taxes, and discusses possible paths for future research.
Jointly Optimal Monetary and Fiscal Policy Rules under Borrowing Constraints
Author: Mr.Michael KumhofPublisher: International Monetary Fund
ISBN: 1451874316
Category : Business & Economics
Languages : en
Pages : 41
Book Description
We study the welfare properties of an economy where both monetary and fiscal policy follow simple rules, and where a subset of agents is borrowing constrained. The optimized fiscal rule is far more aggressive than automatic stabilizers, and stabilizes the income of borrowingconstrained agents, rather than output. The optimized monetary rule features super-inertia and a very low coefficient on inflation, which minimizes real wage volatility. The welfare gains of optimizing the fiscal rule are far larger than the welfare gains of optimizing the monetary rule. The preferred fiscal instruments are government spending and transfers targeted to borrowing-constrained agents.
Dynamic Fiscal Policy with Endogenous Human Capital
Author: Wayne Robert HickenbottomPublisher:
ISBN:
Category :
Languages : en
Pages : 340
Book Description
Dynamic Fiscal Policy
Author: Alan J. AuerbachPublisher:
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages : 196
Book Description
Dynamics of Devaluation and "Equivalent" Fiscal Policies for a Small Open Economy
Author: International Monetary FundPublisher: International Monetary Fund
ISBN: 1451931239
Category : Business & Economics
Languages : en
Pages : 33
Book Description
In pursuing a steady-state reserve target, policymakers in small open economies can resort to devaluation or to temporary increases in public saving. This paper contrasts the dynamic implications of these alternative policies in a model with optimizing agents who possess perfect foresight. In general, the private sector cannot be insulated from the effects of the government’s reserve-accumulation policies. The dynamic effects of devaluation depend on the fiscal policy rule in effect. In contrast to devaluation, the “equivalent” fiscal policies imply discontinuities in private consumption and temporary tax increases may cause key macroeconomic variables to overshoot their steady-state values.
Optimal Monetary and Fiscal Policy in Dynamic Economies
Author: Arturo AntonPublisher: LAP Lambert Academic Publishing
ISBN: 9783838314228
Category :
Languages : en
Pages : 100
Book Description
Over the past twenty five years, fiscal and monetary authorities around the world have pursued policies roughly consistent with the insights from optimal monetary and fiscal policy. In the area of monetary policy, the modern consensus is to set policy rules so that nominal interest rates and inflation are low. In the area of fiscal policy, statutory corporate income tax rates have decreased sharply in OECD countries on average over time. Typically, theoretical models in the literature usually examine either monetary or fiscal policies in isolation, but not both of them simultaneously. This book presents two alternative dynamic, general equilibrium models where the prescriptions from optimal monetary and fiscal policies are simultaneously examined. These models offer some new insights on the interaction of such policies, especially in terms of their effects on household s welfare. A third chapter examines optimal fiscal policy in the context of preference reversals. This book should be especially useful for policymakers in the area of macroeconomics and researchers working in the field.
Optimal Fiscal and Monetary Policy, Debt Crisis and Management
Author: Mr.Cristiano CantorePublisher: International Monetary Fund
ISBN: 1475590199
Category : Business & Economics
Languages : en
Pages : 44
Book Description
The initial government debt-to-GDP ratio and the government’s commitment play a pivotal role in determining the welfare-optimal speed of fiscal consolidation in the management of a debt crisis. Under commitment, for low or moderate initial government debt-to-GPD ratios, the optimal consolidation is very slow. A faster pace is optimal when the economy starts from a high level of public debt implying high sovereign risk premia, unless these are suppressed via a bailout by official creditors. Under discretion, the cost of not being able to commit is reflected into a quick consolidation of government debt. Simple monetary-fiscal rules with passive fiscal policy, designed for an environment with “normal shocks”, perform reasonably well in mimicking the Ramsey-optimal response to one-off government debt shocks. When the government can issue also long-term bonds–under commitment–the optimal debt consolidation pace is slower than in the case of short-term bonds only, and entails an increase in the ratio between long and short-term bonds.