Four Essays On Fiscal Policy After The Global Financial Crisis
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Four Essays On Fiscal Policy After The Global Financial Crisis
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Author : Francesco Molteni
language : en
Publisher:
Release Date : 2013
Four Essays On Fiscal Policy After The Global Financial Crisis written by Francesco Molteni and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
This dissertation is divided in two sections. The first section addresses the question of the consequences of fiscal policy interventions on the economy and the second section analyzes the issue of the liquidity of European Government bonds during the recent financial crisis, the effect ofliquidity shock on these securities and consequences ofpolicy responses. The frrst chapter studies the impact of a discretionary government spending shock on economic activity and other macroeconomic variables by using an alternative two-step procedure for the identification of the govemment spending shock. The second chapter analyzes the effects of a combination of fiscal and monetary policy shocks on macroeconomic and financial variables using a Time Varying Parameters Factor Augmented VAR (TVP-FA VAR) mode!. The third chapter investigates the European market of repurchase agreements and shows that government bonds represent a key fraction of the collateral in these transactions. lt also examines the effects of a rise in haircuts on the value of govemment bonds and shows that this mechanism may represent a channel in the transmission mechanism of banking and sovereign-debt crises in the periphery of the Eurozone. Following the empirical findings of the third chapter, the last chapter proposes a DSGE model with financial frictions to assess the impact of a negative liquidity shock and the consequences ofunconventional policy.
Fiscal Policy After The Financial Crisis
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Author : Alberto Alesina
language : en
Publisher: University of Chicago Press
Release Date : 2013-06-25
Fiscal Policy After The Financial Crisis written by Alberto Alesina and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-06-25 with Business & Economics categories.
The recent recession has brought fiscal policy back to the forefront, with economists and policy makers struggling to reach a consensus on highly political issues like tax rates and government spending. At the heart of the debate are fiscal multipliers, whose size and sensitivity determine the power of such policies to influence economic growth. Fiscal Policy after the Financial Crisis focuses on the effects of fiscal stimuli and increased government spending, with contributions that consider the measurement of the multiplier effect and its size. In the face of uncertainty over the sustainability of recent economic policies, further contributions to this volume discuss the merits of alternate means of debt reduction through decreased government spending or increased taxes. A final section examines how the short-term political forces driving fiscal policy might be balanced with aspects of the long-term planning governing monetary policy. A direct intervention in timely debates, Fiscal Policy after the Financial Crisis offers invaluable insights about various responses to the recent financial crisis.
Three Essays On The Global Financial Crisis And Fiscal Policy
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Author : Kyonghoon Kim
language : en
Publisher:
Release Date : 2016
Three Essays On The Global Financial Crisis And Fiscal Policy written by Kyonghoon Kim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with Financial crises categories.
Essays On Fiscal Monetary And Macroprudential Policy
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Author : Christopher Johnson
language : en
Publisher:
Release Date : 2020
Essays On Fiscal Monetary And Macroprudential Policy written by Christopher Johnson and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
My dissertation investigates policy-oriented issues relating the the Great Recession from a macro-financial perspective. The first chapter focuses on macroprudential policy in the context of the Global Financial Crisis. The second chapter evaluates the effectiveness of fiscal stimulus in response to the Great Recession. The third chapter considers welfare-maximizing monetary policy when the liquidity of assets depends on the opinions of investors. A striking feature of the Great Recession was that all G7 countries experienced a simultaneous decline in economic activity. Two crucial developments prior to the crisis were the rise of non-bank financial intermediation, or shadow banking, and increased trade in asset-backed securities around the world. In the first chapter of my dissertation, I describe the extent to which shadow banking and securitization contributed to the high degree of international comovement during the Great Recession, which largely resulted from the collapse of the US housing bubble. In order to address this, I utilize a novel two-country real business cycle model with financial intermediation disaggregated between commercial and shadow banking in both countries, the latter of which specializes in securitization. When a negative country-specific shock occurs, both countries experience a simultaneous decline in both real and financial economic activity. The shock is transmitted across borders through a balance sheet channel, and is then amplified by the high leverage of shadow banks. On the policy front, I find that when capital controls are imposed on securities originated by the country where a negative shock occurs, both the transmission and amplification factors are reduced. In response to the Great Recession, fiscal stimulus was utilized with the American Recovery and Reinvestment Act (ARRA) of 2009. The effectiveness of fiscal stimulus has been well-documented through empirical estimates of fiscal multipliers. However, the validity of these measures came into question following the ARRA, with most criticisms regarding endogeneity. In 2011, Robert Barro wrote in the Wall Street Journal that the studies the Obama administration relied on were dependent upon models that ``substitute assumptions for identification.'' The assumptions in question are the recursive structures involving the endogenous variables utilized in these models, also known as a Cholesky ordering. In the second chapter of my dissertation, I test the validity of Cholesky ordering in the context of measuring fiscal multipliers. Using a novel iterative projection instrumental variable approach in a structural vector autoregressive framework, I find strong evidence in the rejection of every possible recursive ordering among standard endogenous variables utilized throughout the literature. I also find new estimates of fiscal multipliers that do not rely on a Cholesky ordering. My estimates are conservative relative to the rest of the literature, with fiscal multipliers that are economically and statistically significant after four quarters, but disintegrate within eight quarters. In the third chapter of my dissertation, I consider how differences of opinion among investors affect the liquidity value of assets. I use a monetary framework in which money and risky assets can facilitate trade. While the future value of money is agreed upon among investors, the risky asset is opinion-sensitive such that traders may disagree on its future value. This results in a pecking order theory of trade, which depends on the perceptions of the traders in question. I find that optimists prefer to use money instead of assets as a method of payment, whereas pessimists prefer to use assets instead of money. Intuitively, optimists value assets for their future return value, so they would rather hold onto their assets to realize those returns. Pessimists expect less favorable returns on their assets, so they are willing to part ways with them. Pessimists buys assets because there is always the possibility that they meet an optimist to trade with, by which the terms of trade will be favorable for pessimists. Regarding monetary policy, the Friedman rule is welfare-maximizing. Additionally, monetary policy can alter the composition of investors in the asset market. Specifically, lowering the nominal interest rate drives pessimists out of the asset market.
Essays On India S Monetary And Fiscal Policies And Their Interrelation
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Author : Duc Truong Nguyen
language : en
Publisher:
Release Date : 2014
Essays On India S Monetary And Fiscal Policies And Their Interrelation written by Duc Truong Nguyen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with Economic policy categories.
This dissertation consists of four essays on India's monetary and fiscal policies and their interrelation. The Introduction reviews the existence of the relationship between these two policies. This chapter employs a simple panel data model to analyse the relationship between fiscal deficit and central bank independence (CBI). The intuition behind this model is that if there is a connection between fiscal deficit and CBI, monetary and fiscal policies must be correlated, whence the subsequent analysis of the interrelation between these policies is feasible. This connection was confirmed by statistically significant coefficients of the estimated model. With the result from the first essay, I examine monetary reaction function (MRF) for India in the second essay. I construct MRFs using different versions of Phillips and IS Curves. I derive two IS Curves from a basic neoclassical model and a model by Davig and Leeper (2011), combine these two IS Curves with three available types of Phillips Curves to make six MRFs. I then estimate these MRFs using the Markov switching method with the purpose of finding out what the Indian MRFs look like and whether it switches between active and passive states. If India's MRFs switches between these states, India's fiscal reaction function must be estimated using the same Markov switching method accordingly. It turned out that India's monetary policy is always in active state. OLS estimations are carried out to confirm the results from Markov switching method. The estimated MRFs track the actual data very well. The third essay estimates India's fiscal reaction function (FRF). With the result from the second essay that India's monetary is always in active state, it can be inferred that India's fiscal policy should be passive because this makes the economy more stable. Therefore, I proceed with estimating India's FRF based on the government intertemporal budget constraint, which is always balance and passive in its nature. To study India FRF, this essay first establishes the theoretical foundations for the empirical estimation. In estimating India's FRF, data stationary problems are found and unbalanced regressions are employed. This essay finds that India's fiscal policy depends on debt, output gap, and interest rate levels. The estimated FRF tracks the actual reaction function very closely. The fourth essay uses a VAR model to analyze the interrelation between India's monetary and fiscal policies. This essay modifies a financial model by Sharma and Jha (2012) then applies VAR to study the interrelation between fiscal and monetary policies and how these policies affect economic growth in the context of India. It is found that the Indian economy is resilient to exogenous shock. Besides two reasons suggested in Sharma and Jha (2012) including the low integration level of the Indian banking system to the world financial market and the domination of domestic consumption and investment, this essay adds that right policies have been carried out in the face of the global financial crisis and monetary policy is always effective in dealing with exogenous shock. The dissertation concludes with a short chapter on conclusions.
Global Economic Financial Crisis
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Author :
language : en
Publisher:
Release Date : 2009-01-01
Global Economic Financial Crisis written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-01-01 with Economic history categories.
A collapse in housing prices in the United States in the middle of 2007 led to a rise in defaults in loan repayments and then rapidly to major losses in financial institutions across the world. The financial crisis of 2007 and 2008 took little time to turn into the global economic crisis of 2008 and 2009, leaving no country and no sector untouched and has become the worst contraction since the Depression of the 1930s. The structure of financial innovation that drove growth for close to a quarter of a century has turned out to be a house of cards. Governments and central banks are now rethinking the organization and role of banks. The incentives given to executives of the financial institutions to promote profits at all costs have been put under scrutiny. This volume puts together a collection of essays on a number of aspects of the global economic and financial crisis that were first published in the Economic & Political Weekly in early 2009. Economists and policy makers from across the world cover six areas from a global and Indian perspective. One set of articles discusses the structural causes of the financial crisis. A second focuses on banking and offers solutions for the future. A third examines the role of the US dollar in the unfolding of the crisis. A fourth area of study is the impact on global income distribution. A fifth set of essays takes a long-term view of policy choices confronting the governments of the world. A separate section assesses the downturn in India, the state of the domestic financial sector, the impact on the informal economy and the reforms necessary to prevent another crisis. This book is essential reading for anyone interested in and concerned about the global economic and financial crisis.
Essays On The Global Financial Crisis
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Author : Heiko Hesse
language : en
Publisher:
Release Date : 2016
Essays On The Global Financial Crisis written by Heiko Hesse and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
The Global Financial Crisis has been a watershed event not only for many advanced economies but also emerging markets around the world. This book brings together research and policy work over the last nine years from staff at the IMF. It covers a wide range of issues such as the origins of the financial crisis, the policy response, spillovers and contagion, case studies, bank stress testing, and debt sustainability and sovereign debt restructuring.
Global Waves Of Debt
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Author : M. Ayhan Kose
language : en
Publisher: World Bank Publications
Release Date : 2021-03-03
Global Waves Of Debt written by M. Ayhan Kose and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-03-03 with Business & Economics categories.
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
A Decade After The Global Recession
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Author : M. Ayhan Kose
language : en
Publisher: World Bank Publications
Release Date : 2021-03-19
A Decade After The Global Recession written by M. Ayhan Kose and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-03-19 with Business & Economics categories.
This year marks the tenth anniversary of the 2009 global recession. Most emerging market and developing economies weathered the global recession relatively well, in part by using the sizable fiscal and monetary policy ammunition accumulated during prior years of strong growth. However, their growth prospects have weakened since then, and many now have less policy space. This study provides the first comprehensive stocktaking of the past decade from the perspective of emerging market and developing economies. Many of these economies have now become more vulnerable to economic shocks. The study discusses lessons from the global recession and policy options for these economies to strengthen growth and prepare for the possibility of another global downturn.
The Great Inflation
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Author : Michael D. Bordo
language : en
Publisher: University of Chicago Press
Release Date : 2013-06-28
The Great Inflation written by Michael D. Bordo and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-06-28 with Business & Economics categories.
Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity. This volume focuses on understanding the causes of the Great Inflation of the 1970s and ’80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period’s rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today’s global and increasingly complex economic environment.