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Author: Miguel Garza Casado Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The current economic crisis has highlighted the need for data that are both timely and local so that the effects of fiscal policy options on local economies can be evaluated more immediately. This paper highlights the potential value of using two new sources of near real-time data to inform decisions about the appropriate stimulus approach to implement. The first data source is administrative records that provide universal, weekly, information on unemployment claimants. The second data source is transaction level data on economic activity that are available on a daily basis. We make use of discrete changes in stimulus payments to construct a framework for evaluating real-time effects of fiscal policy on local economic activity. In particular, we leverage cross-county and over-time variation in the relative size of the Federal Pandemic Unemployment Compensation (FPUC) COVID-19 supplement to Unemployment Insurance - from $0 to $600 to $300 between March and September 2020 - to estimate the local economic impact of unemployment, earnings replacement, and the interaction between the two. We find that higher earnings replacement rates lead to significantly more consumer spending, even with increases in the unemployment claimant rate, which is consistent with the goal of the fiscal stimulus.
Author: Miguel Garza Casado Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The current economic crisis has highlighted the need for data that are both timely and local so that the effects of fiscal policy options on local economies can be evaluated more immediately. This paper highlights the potential value of using two new sources of near real-time data to inform decisions about the appropriate stimulus approach to implement. The first data source is administrative records that provide universal, weekly, information on unemployment claimants. The second data source is transaction level data on economic activity that are available on a daily basis. We make use of discrete changes in stimulus payments to construct a framework for evaluating real-time effects of fiscal policy on local economic activity. In particular, we leverage cross-county and over-time variation in the relative size of the Federal Pandemic Unemployment Compensation (FPUC) COVID-19 supplement to Unemployment Insurance - from $0 to $600 to $300 between March and September 2020 - to estimate the local economic impact of unemployment, earnings replacement, and the interaction between the two. We find that higher earnings replacement rates lead to significantly more consumer spending, even with increases in the unemployment claimant rate, which is consistent with the goal of the fiscal stimulus.
Author: Mr.Michael Kumhof Publisher: International Monetary Fund ISBN: 1451874014 Category : Business & Economics Languages : en Pages : 42
Book Description
This paper uses the IMF's Global Integrated Monetary and Fiscal Model to compute shortrun multipliers of fiscal stimulus measures and long-run crowding-out effects of higher debt. Multipliers of two-year stimulus range from 0.2 to 2.2 depending on the fiscal instrument, the extent of monetary accommodation and the presence of a financial accelerator mechanism. A permanent 0.5 percentage point increase in the U.S. deficit to GDP ratio raises the U.S. tax burden and world real interest rates in the long run, thereby reducing U.S. and rest of the world output by 0.3-0.6 and 0.2 percent, respectively.
Author: Carolina Correa-Caro Publisher: International Monetary Fund ISBN: 1484386973 Category : Business & Economics Languages : en Pages : 38
Book Description
Using financial statement data from the Thomson Reuter’s Worldscope database for 22,333 non-financial firms in 52 advanced and emerging economies, this paper examines how fiscal stimulus (i.e., changes in structural deficit) interacted with sectoral business cycle sensitivity affected corporate profitability during the recovery period of the global financial crisis (GFC). Using cross-sectional analyses, our findings indicate that corporate profitability improved significantly after the GFC fiscal stimulus, especially in manufacturing, utilities and retail sectors. Firm size and leverage are also found to be significant in explaining changes in corporate profitability.
Author: John J. Heim Publisher: Springer Nature ISBN: 3030656756 Category : Business & Economics Languages : en Pages : 577
Book Description
This book offers a series of statistical tests to determine if the “crowd out” problem, known to hinder the effectiveness of Keynesian economic stimulus programs, can be overcome by monetary programs. It concludes there are programs that can do this, specifically “accommodative monetary policy.” They were not used to any great extent prior to the Quantitative Easing program in 2008, causing the failure of many fiscal stimulus programs through no fault of their own. The book includes exhaustive statistical tests to prove this point. There is also a policy analysis section of the book. It examines how effectively the Federal Reserve’s anti-crowd out programs have actually worked, to the extent they were undertaken at all. It finds statistical evidence that using commercial and savings banks instead of investment banks when implementing accommodating monetary policy would have markedly improved their effectiveness. This volume, with its companion volume Why Fiscal Stimulus Programs Fail, Volume 2: Statistical Tests Comparing Monetary Policy to Growth, provides 1000 separate statistical tests on the US economy to prove these assertions.
Author: Julian Di Giovanni Publisher: ISBN: Category : Business logistics Languages : en Pages : 0
Book Description
This paper builds on Baqaee and Farhi (2022) and di Giovanni et al. (2022) to quantify the contribution of fiscal policy on U.S. inflation over the Dec-2019 to June-2022 period. Model calibrations show that aggregate demand shocks explain roughly two-thirds of total model-based inflation, and that the fiscal stimulus contributed half or more of the total aggregate demand effect.
Author: Miguel Garza Casado Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
Policymakers, faced with different options for replacing lost earnings, have had limited evidence to inform their decisions. The current economic crisis has highlighted the need for data that are local and timely so that different fiscal policy options on local economies can be more immediately evaluated. This paper provides a framework for evaluating real-time effects of fiscal policy on local economic activity using two new sources of near real-time data. The first data source is administrative records that provide universal, weekly, information on unemployment claimants. The second data source is transaction level data on economic activity that are available on a daily basis. We use shift-share approaches, combined with these two data sources and the novel cross-county variation in the incidence of the COVID-19 supplement to Unemployment Insurance to estimate the local impact of unemployment, earnings replacement, and their interaction on economic activity. We find that higher replacement rates lead to significantly more consumer spending - even with increases in the unemployment rate - consistent with the goal of the fiscal stimulus. Our estimates suggest that, based on the latest data, eliminating the Federal Pandemic Unemployment Compensation (FPUC) supplement would lead to a 44% decline in local spending. If the FPUC supplement is reduced to $200, resulting in a reduction of the replacement rate by 44%, spending would fall by 28%. Even if the FPUC supplement is reduced to $400, the replacement rate would fall by 29% and spending would fall by 12%. Because these data are available in every state, the approach can be used to inform decision making not just in this current crisis, but also in future recessions.
Author: Atif Mian Publisher: ISBN: Category : Automobiles Languages : en Pages : 28
Book Description
A key rationale for fiscal stimulus is to boost consumption when aggregate demand is perceived to be inefficiently low. We examine the ability of the government to increase consumption by evaluating the impact of the 2009 "Cash for Clunkers" program on short and medium run auto purchases. Our empirical strategy exploits variation across U.S. cities in ex-ante exposure to the program as measured by the number of "clunkers" in the city as of the summer of 2008. We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 - only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.
Author: Miguel Garza Casado
Author: Miguel Garza Casado
Author: 
Author: Mr.Michael Kumhof
Author: Carolina Correa-Caro
Author: Jérémie Cohen-Setton
Author: John J. Heim
Author: Julian Di Giovanni
Author: Miguel Garza Casado
Author: Robert E. Weintraub
Author: Atif Mian