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3 edition of Why is fiscal policy often procyclical? found in the catalog.

Why is fiscal policy often procyclical?

Alberto Alesina

Why is fiscal policy often procyclical?

by Alberto Alesina

  • 317 Want to read
  • 24 Currently reading

Published by National Bureau of Economic Research in Cambridge, Mass .
Written in English

    Subjects:
  • Fiscal policy -- Econometric models,
  • Fiscal policy -- Developing countries

  • Edition Notes

    StatementAlberto Alesina, Guido Tabellini.
    SeriesNBER working paper paper series -- no. 11600., Working paper series (National Bureau of Economic Research) -- working paper no. 11600.
    ContributionsTabellini, Guido Enrico, 1956-, National Bureau of Economic Research.
    The Physical Object
    Pagination27, [18] p. ;
    Number of Pages27
    ID Numbers
    Open LibraryOL17627845M
    OCLC/WorldCa61856684

      Procyclic is a condition of positive correlation between the value of a good, a service or an economic indicator and the overall state of the economy. In other words, the value of the good. Learn procyclical fiscal policy with free interactive flashcards. Choose from different sets of procyclical fiscal policy flashcards on Quizlet.

      Counter-cyclical fiscal policies are those which act in the opposite way to the conventional economic cycle. These policies tends to cool down the economy when there is a boom and stimulate the economy when it is slow. An example for counter c. Chapter 12 - Fiscal Policy. Printer Friendly. Introduction. Fiscal Policy and the AD/AS Model. They are often procyclical, because balanced-budget requirements cause states and local governments to raise taxes in a recession or cut spending making the recession possibly worse. In an inflationary period, they may increase spending or cut.

    1. Introduction. The cyclical behavior of fiscal policy differs across countries by income group. In the past, while industrial countries have tended to pursue fiscal policy that is countercyclical or at worst acyclical, developing countries have tended to follow procyclical fiscal policy: they have increased spending (or cut taxes) during periods of expansion and cut spending (or raised taxes Cited by:   In this model, the inclusion of either the contemporaneous (as recommended by Kneller, Bleaney, and Gemmell ; Kneller, Gemmell, and Sanz ) or the lagged values of one side of fiscal policy on the reaction function of the other side of fiscal policy can complicate the identification of the threshold by:


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Why is fiscal policy often procyclical? by Alberto Alesina Download PDF EPUB FB2

Why is Fiscal Policy Often Procyclical. Alberto Alesina, Guido Tabellini. NBER Working Paper No. Issued in September NBER Program(s):Economic Fluctuations and Growth, Public Economics, Political Economy Many countries, especially developing ones, follow procyclical fiscal polices, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions.

Alesina, Campante, and Tabellini Why Is Fiscal Policy Often Procyclical. budget surpluses as a share of GDP should increase. The opposite should occur in recessions.1 In practice, in many developing countries fiscal policy has the opposite prop-erties: it is procyclical.

In particular, government spending as a share of GDPFile Size: KB. Abstract: Fiscal policy is procyclical in many developing explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to Cited by: Additional Physical Format: Online version: Alesina, Alberto.

Why is fiscal policy often procyclical. Cambridge, Mass.: National Bureau of Economic Research, © Downloadable. Fiscal policy is procyclical in many developing countries. We explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to?starve the Leviathan.

to reduce political rents. Voters observe the state of the economy but not the rents appropriated by corrupt governments. When they observe a boom, voters optimally demand more public goods.

Downloadable. Many countries, especially developing ones, follow procyclical fiscal polices, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions.

We provide an explanation for this suboptimal fiscal policy based upon political distortions and incentives for less-than-benevolent government to appropriate rents. Get this from a library. Why is fiscal policy often procyclical?. [Alberto Alesina; Guido Enrico Tabellini; National Bureau of Economic Research.] -- "Many countries, especially developing ones, follow procyclical fiscal polices, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions.

We provide an. Fiscal policy is procyclical in many countries, and especially in developing ones. We explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to "starve the Leviathan" to reduce political rents.

Why is Fiscal Policy Often Procyclical. Alberto Alesina and Guido Tabellini NBER Working Paper No. September JEL No. ABSTRACT Many countries, especially developing ones, follow procyclical fiscal polices, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions.

We provide an. a procyclical bias to fiscal policy myopic fiscal policy (an increase in government spending during booms and excessive government borrowing) This situation can lead to an EXCESS of debt accumulation WHYCited by: Alesina, Campante, and Tabellini Why Is Fiscal Policy Often Procyclical.

budget surpluses as a share of GDP should increase. The opposite should occur in recessions.1 In practice, in many developing countries fiscal policy has the opposite prop-erties: it is procyclical. In particular, government spending as.

Why Is Fiscal Policy Often Procyclical. Discussion paper no. Harvard Institute of Economic Research, CESifo Working Paper No. Anderson, B. and Minarik, J. Why is fiscal policy often procyclical. ∗ Alberto Alesina and Guido Tabellini Harvard University and IGIER Bocconi First draft: March This version: February Abstract Fiscal policy is procyclical in many countries, and especially in de-veloping ones.

We explain this policy failure with a. Why is fiscal policy often procyclical. ∗ Alberto Alesina, Filipe Campante and Guido Tabellini Harvard University, Harvard University and IGIER Bocconi First draft: March This version: June Abstract Fiscal policy is procyclical in many developing countries.

We ex-plain this policy failure with a political agency problem. ProcyclicalityCited by: There are strong evidences that fiscal policy is procyclical in MENA region: Fiscal expansions tend to take place in good times, and not du ring bad times when they m ight play some role in s. 1. How is fiscal policy conducted in emerging markets compared to industrial countries.

Why has fiscal policy often been procyclical in emerging markets. Are there developing countries that have "graduated"--that is, switched from being procyclical to countercyclical.

Has fiscal policy been an effective countercyclical tool. Procyclical fiscal policy is puzzling: why would the fiscal authority want to amplify an already volatile business cycle by adding fuel to the fire during booms and aggravating recessions by. We study the cyclical behavior of fiscal policy to explain why some countries exhibit procyclical fiscal policy stances-being expansionary in good times and contractionary in bad times.

Fiscal policy is often utilized alongside monetary policy, which involves the banking system, the management of interest rates and the supply of money in : Anne Sraders. Procyclical vs Countercyclical Fiscal Policy Ideally, a country’s fiscal policy should be countercyclical. Such a policy would moderate the business cycle by stimulating the economy with tax cuts and new spending during a recession and using tighter policy to prevent overheating during a boom In contrast, a policy that makes the business cycle worse by adding stimulus during a boom and.

With this mix of incentives, the prediction is that intergovernmental transfers will be procyclical and that sub-central government spending will be more procyclical than central government spending.

Public choice analysis of pressure for increased public spending predicts a specific pattern of cyclical government by: Procyclical has a different meaning in the context of economic policy. In this context, it refers to any aspect of economic policy that could magnify economic or financial fluctuations.

An economic policy that is believed to decrease fluctuations is called countercyclical. I talked about this in the first context in What got me thinking.fiscal policy is actually more procyclical in developed economies.

Before I proceed, let me clarify some terms used in the paper. Fiscal policy is defined countercyclical if the (estimated) semi-elasticity of the primary balance-to-GDP ratio with respect to the output gap is strictly positive, so that the primary balance rises more thanFile Size: KB.