Aggregate Spending Research Articles

Policy Feedbacks and Medicaid on its 60th Anniversary.

Despite early skepticism about Medicaid's ability to withstand retrenchment as a program of "welfare medicine," it has proved remarkably durable. Existing analyses explain durability with a policy feedbacks perspective - how program provisions affect the subsequent political environment and policymaking options. This article updates earlier feedback accounts to the ACA era. Examines extant findings on policy feedbacks in Medicaid at the elite and mass levels since the implementation of the Affordable Care Act of 2010. Mass feedbacks have been modest. Medicaid expansion under the ACA only slightly increased beneficiary political participation, if at all. Medicaid attitudes among beneficiaries and the larger public have become somewhat more supportive. Elite-level feedbacks are the most powerful, with the federal contribution, increased for expansion populations under the ACA, inexorably shaping state incentives. However, continued rejection of Medicaid expansion and attempts to add conditions to Medicaid eligibility in Republican-led states with large shares of Black residents demonstrate that federalism, race, and the program's welfare medicine image continue to threaten the program. Medicaid survives as the nation's largest health insurance program by enrollment, and is deeply woven into the health care system, but remains chronically vulnerable and variable across states despite robust aggregate enrollment and spending.

Adverse Childhood Experiences: Health Care Utilization And Expenditures In Adulthood.

Adverse childhood experiences (ACEs) have been shown to be strong predictors of socioeconomic status, risky health behaviors, chronic health conditions, and adverse outcomes. However, less is known about their association with adult health care utilization and expenditures. We used new data from the 2021 Medical Expenditure Panel Survey-Household Component (MEPS-HC) to provide the first nationally representative estimates of ACEs-related health care utilization and expenditure differences based on direct observation, rather than model-based extrapolation. Compared to demographically similar adults without ACEs, those with ACEs had substantially higher utilization and 26.3percent higher expenditures. The aggregate spending difference across the 157.6million US adults with ACEs was $292billion in 2021. Moreover, we observed large, graded relationships between ACEs and health status, health behaviors, and some dimensions of socioeconomic status. We also found associations between ACEs and a range of adverse adult circumstances, also newly measured in the 2021 MEPS, including financial and housing problems, social network problems, little or no life satisfaction, stress, food insecurity, verbal abuse, physical harm, and discrimination.

Monetary policy framework in Sri Lanka and its impact on the financial sector: A review

Monetary policy is a prominent stabilization mechanism often used to accomplish price and economic stability in a country. The success of monetary policy depends on the operating economic environment, the institutional framework adopted, and the choice and mix of the instruments used. The aim of this paper was to review the evolution of the monetary policy framework in Sri Lanka and its impact on the financial sector. The review is important, and monetary policy is intended to impact aggregate spending in the economy to contribute to the goals of full employment, price stability, sustainable economic growth, and balance of payments equilibrium. The paper reviewed more than twenty-five research and review papers using a thematic approach. The paper explains the historical evolution of monetary policy regimes in Sri Lanka and the reasons for adopting various monetary and exchange rate policy regimes from time to time. The review considers national and international studies on monetary policy regimes and their impact on the financial system. The paper concludes that the Currency Board could not influence the money supply in any way, and until the adoption of open economy policies in 1977 under the fixed exchange rate regimes, the Central Bank had no control over domestic inflation. The review also identifies that flexible inflation targeting is the international best practice of Central Banking, and flexible inflation targeting enables the maintenance of low inflation, thereby helping economies achieve a high and stable growth path. However, it emphasizes that it should be maintained sustainably subject to several conditions through government intervention.

On the Relationship between the Money Rate of Interest and Aggregate Investment Spending

Careful observers had already pointed out before the capital theory controversies that an investment demand schedule inversely responsive to the rate of interest is theoretically untenable. This implies that the weak empirical evidence showing the negative relation between aggregate investment spending and the rate of interest cannot be explained via the neoclassical investment theory. Assuming a short-run framework and concentrating on the “Sources and Uses of Funds Account,” it is shown here that the inverse relationship between the two variables derives, not from the investment demand function, but from the ability to finance investment spending. The explanation is valid only in the short run. In the long run, aggregate investment spending may rise, fall, or remain constant in response to a change in the rate of interest. JEL Classification: B51, E11, E22, G31

Military spending crowding out health and education spending: which views are valid in Egypt?

This study examines the relationship between government spending, specifically military spending, government spending on health, government spending on education, and economic growth in Egypt over the period from 1980 to 2021. The paper utilizes a Granger causality test to detect the directional relationship between spending components and GDP growth. Furthermore, an autoregressive distributed lag (ARDL) model, including error-correction models, was established to determine the long- and short-term relationships among these variables. The study contrasts Wagner’s versus Keynes’s views of the government spending relationship with economic growth, with a greater emphasis on Keynes’s argument for military spending enhancing economic growth. While previous studies have investigated the relationship between aggregate spending and economic growth from a single or two-way direction of causality, the present study contributes to the literature by exploring the possibility of military spending crowding out spending on health and education and detecting this causality and dynamic relationship. The empirical results support the Keynesian view of causality from all government spending components to economic growth. However, short- and long-term analyses revealed a negative relationship between military spending and economic growth. Moreover, the short-term impact of government spending on education and health on economic growth is negative, but positive in the long-term. Finally, the causality test revealed that military spending influences health and education spending. Additionally, a unidirectional relationship exists between military spending and health expenditure, which requires further research. The policy implication of this study shows that although spending is exogenous to economic growth, it does not align with the Keynesian view of inducing growth. Instead, spending has negative current and future implications for economic development.

How Does Consumption Respond to News about Inflation? Field Evidence from a Randomized Control Trial

We implement a survey of Dutch households in which random subsets of respondents receive information about inflation. The resulting exogenously generated variation in inflation expectations is used to assess how expectations affect consumption decisions. The causal effects of reduced inflation expectations on nondurable spending are imprecisely estimated, but there is a sharp positive effect on durable spending. This is likely driven by the fact that Dutch households seem to become more optimistic about their real income and aggregate spending when they decrease their inflation expectations. We find little role for cognitive or financial constraints in explaining spending responses. (JEL C83, D12, D83, D84, E21, E31)

The Rise of Niche Consumption

Over the last 15 years, individual households have concentrated their spending on a few preferred products. However, this is not driven by “superstar” products capturing larger market shares. Instead, households increasingly purchase different products from each other. As a result, aggregate spending concentration has decreased. We develop a model of heterogeneous household demand and use it to conclude that increasing product variety drives these divergent trends. When more products are available, households select products better matched to their tastes. This delivers welfare gains from selection equal to about half a percent per year in the categories covered by our data. (JEL D12, D91, E21, L66)

NATO Security Burden Sharing, 1991–2020

ABSTRACT In contrast to much of the extant literature, the paper devises a composite security burden measure for the NATO alliance that accounts for three different contributions by allies to their collective security: namely, military expenditure (ME), foreign assistance, and UN peacekeeping spending. Generally, NATO defense burden sharing and free riding are judged solely based on ME even though foreign assistance and peacekeeping promote world prosperity, stabilize regimes, and quell conflicts that affect NATO’s collective security. Our parametric tests for free riding apply a spatial-lag panel model, which addresses the interdependency issues, to a broader security-spending measure that accounts for allies’ membership, contiguity, and inverse distance. In all spatial models, we uncover robust evidence of free riding where allies decrease their aggregate security spending in response to increases in the collective security spending of other allies. We apply a panel generalized method of moments (GMM) estimator to adjust for endogeneity concerns.

Government sectoral spending and human development in Nigeria: Is there a link?

The continuous increase in government expenditure in the last three decades without a commensurate improvement in all known indicators of development has generated heated debates among scholars as to the justification for the persistent rise in the annual expenditure of the government. Therefore, this study examined the effects of government sectoral spending on human development in Nigeria using annual data spanning the period 1986–2021. This study contributed to the literature by examining the effects of government sectoral spending on human development using a robust human development index that captures the multifaceted state of economic development in terms of educational attainment, life expectancy and per capita income, unlike previous studies that concentrated on aggregate government spending and used the gross domestic product as an indicator of development. Surprisingly, however, results from the Autoregressive Distributed Lag (ARDL) model employed indicated that both in the short and long run, there is no link between government sectoral spending and human development in Nigeria. Although, outcomes from ECMs suggest that government sectoral spending may affect human development in the long run.

Keuangan digital: suatu studi literatur

The financial industry has experienced a continuous evolution in service delivery due to digitization, where this evolution is characterized by expanded connectivity and improved information processing speed both at the customer interface and in back-office processes. The role of contracts in the economy has recently received great attention, where contracts are an important element of the operation of a market economy. The relevance of digital finance and financial inclusion for poverty alleviation and economic growth is of interest to policymakers and academics alike, particularly because of a number of issues that if addressed can make digital finance work better for individuals, businesses, governments and economies. Digital finance and financial inclusion have several benefits for financial service users, digital financial providers, governments and the economy such as increasing financial access among poor individuals, reducing financial intermediation costs for banks and fintech providers, and increasing aggregate spending for governments. The purpose of this study was to determine the determinants of digital finance. This study used a systematic literature review method and used 18 articles as study material, which were obtained from the scopus.com and sciencedirect.com pages. The results of the study show the determinants of digital finance, both variables that influence, are influenced or mediate. The results of the literature study did not find digital finance as a moderating variable.

Analisis Fungsi Pengeluaran Pemerintah Terhadap Laju Pertumbuhan Ekonomi Kota Surabaya

The realization of economic growth and development cannot be separated from the support of the allocation of funds used to make it happen. These expenditures will increase aggregate spending and increase the level of economic activity in the country (Sukirno, 2004). From this aspect, research was carried out using a qualitative descriptive method originating from the BPS City of Surabaya. The results obtained by the regional budget in the city of Surabaya from 2018 – 2020 have fluctuated. In 2019 the regional budget for the City of Surabaya increased by 26.24% while it decreased in the following year by 22.18%. While in 2019 Surabaya City's GRDP increased by 6.08%, but in 2020 it decreased by 4.85% due to Covid-19.

FACTORS AFFECTING BOND MARKET DEVELOPMENT IN ASIAN DEVELOPING COUNTRIES

A financial market is considered to play a key role in economic stability. An economy should encourage investments to achieve financial stability. Bond markets develop a platform for foreign investors to invest their funds in an alternative method of investment other than bank deposits. Maintaining an effective bond market will increase the fund flows to the economy and aggregate spending, ultimately increasing the economic growth of a particular economy. Therefore, developing a bond market is a mandatory requirement for the economic expansion of a country. There are many factors affecting bond market development. However, these factors can vary due to a particular country's economic condition. As this is an emerging area, a limited number of examines have been carried out. Further, examining the factors affecting bond market expansion in Asian growing countries and the impact of COVID-19 is important as there are no prior studies have been conducted. Therefore, this investigation is being done to look at the factors affecting bond market development in seven developing Asian countries for twelve years from 2010-2021 using panel data regression. The study used seven independent variables namely, the size of the banking system, interest rate spread, money supply, inflation, external debt, economic size, stock market capitalization, and dummy variable of COVID-19 while using the bond market development as the dependent variable. The main element influencing the bond market's growth is the banking system's size. It suggests that local credit offered by banking system changes impacts the bond market’s growth. Another important element influencing the growth of the bond market is the interest rate spread. The lending rate and deposit rates should be a concern for policymakers and decision-makers. Changes in those rates imply that it influences the expansion of the bond market. The M2 money supply suggests that changes in the money supply affect how the bond market develops. Another important consideration in the growth of the bond market is inflation.

Unconventional Fiscal Policy at Work

In an effort to stabilize the economy during the COVID-19 pandemic, the German government reduced value-added taxes (VAT) by 3 percentage points for a period of six months in the latter half of 2020. This measure resulted in a boost in aggregate consumer spending on both durable and semidurable goods during the six-month period, with spending decreasing once the VAT reduction was reversed. The effect of the temporary VAT cut on durable spending was stronger than on semidurable spending. Additionally, the temporary VAT cut also stabilized, and even slightly increased, inflation expectations in the second half of 2020.

The Government Spending Multiplier in a Multisector Economy

We study the effects of aggregate government spending shocks in a production network economy where sectors differ in their price rigidity, factor intensities, use of intermediate inputs, and contribution to final demand. The model implies an aggregate value-added multiplier that is 75 percent (and $0.32) larger than that obtained in the average one-sector economy. This amplification is mainly driven by input–output linkages and—to a lesser extent—sectoral heterogeneity in price rigidity. Aggregate government spending shocks also lead to heterogeneous responses of sectoral value added, which are larger among upstream industries. We present novel empirical evidence supporting this prediction. (JEL E12, E16, E23, E43, E52, E62, H50)

Does Environmental Quality Drive Health Spending? A Cross-Country Analysis

The paper aims at empirically investigating the long-run explanatory power of environmental quality and energy intensity towards aggregate health spending volumes for a set of 108 countries. The significance of CO2-related pollution and energy intensity levels as long-run determinants of health spending is well-evident, as proven from modern pooled data econometric procedures applied. Keeping in view the previous research on the subject, the sample set of countries is disaggregated into four distinct groups by following the World Bank’s country classification scheme i.e. low-income, lower-middle income, upper- middle income, and high-income countries. The hypothesized relationship between health spending, environmental pollution and energy intensity is empirically verified by employing the residual based (Pedroni cointegration test) and maximum likelihood based (Fisher- Johansen panel cointegration) test of co-integration. The obtained result reveal that plausible inter-relationship between carbon-related emissions and the consequent rise in health spending is found to be existing more prominently for upper-middle and high-income countries, relative to low- and lower-middle income countries, where the proposed relationships are found to be existing at less substantial levels. For the former set of countries, the series bears a positive and statistically significant coefficient value of 1.14 and 0.05, respectively. Energy intensity on the other hand turns out to be even more important long-run determinant of health expenditure. For upper-middle- and high-income country groups, the series bears a negative coefficient value of 0.20 and 0.22, respectively, with high degree of statistical significance. The negative coefficient value of energy intensity series implies that managing the levels of energy intensity up to optimal levels may contribute positively to reducing the growing volumes of public and private health spending.

Does Health Contribute to Economic Growth? An Evidence from Regional Levels in Indonesia

Health can lead economic development in many countries. The higher the quality of health, the more space for increasing economic growth and providing prosperity in the long-run. The current study attempts to estimate the effect of health on regional economic growth in Indonesia. Balanced panel data is set covering 34 provinces from 2015 to 2020. The panel data is estimated using system Generalized Method of Moments (GMM). The findings reveal that smoking level contributes significantly and positively on regional economic growth, while health service has no effect. The non-linear impact of smoking level on regional economic growth is U-shaped. It means that higher smoking level stimulates regional economic growth by the increasing of aggregate spending. The local governments should design health service program and control smoking level properly so that the health risk of cigarette consumption does not offset its benefit to the economy. The policy design will produce better human health and life in all provinces in Indonesia. Consequently, the regional economic growth can be achieved in the long-run.

Balbach and Brunner: A Missing Stop on the Road from Warburton to Friedman-Meiselman and St. Louis

“The Relative Stability of Monetary Velocity and the Investment Multiplier in the United States, 1897–1958,” by Milton Friedman and David Meiselman (1963), typically is recognized as the original study that used a reduced-form equation to evaluate whether autonomous expenditures or the quantity of money was the dominant influence on aggregate spending. It also provided the foundation for the better-known St. Louis equation that followed. Missing from this evolution, however, are important precedents by Karl Brunner and Anatol Balbach that also employed a reduced-form framework to offer evidence on the same debate between the Keynesian expenditure theory and the quantity theory of money. Moreover, these authors also investigated whether the demand-for-money function was stable and inversely related to an interest rate, properties necessary in their reasoning before any more general model of national income determination could be developed. With this foundation, Balbach, in his 1963 PhD dissertation, then derived a reduced-form expression for personal income from an explicit theoretical model and, in its estimation, anticipated and addressed some of the empirical criticisms later directed at the work by Friedman and Meiselman and the early versions of the St. Louis equation. Taken together, the theoretical and empirical work reported in Balbach's dissertation and in a 1959 article by Brunner and Balbach suggest these papers are clear antecedents of later reduced-form expressions and should be recognized as such.

Total Cost of Cancer Care: Evaluating Health System Expenditures through Eight Performance Periods of the Oncology Care Model

<h3>Purpose/Objective(s)</h3> The Oncology Care Model (OCM) is an alternative payment model aimed at providing higher quality, lower cost care to participating Medicare beneficiaries. However, information regarding trends in spending, particularly for radiation oncology (RO) services, is limited. <h3>Materials/Methods</h3> We identified 17,157 episodes of care from 9,898 patients treated at a statewide multispecialty health system through the first eight six-month Performance Periods (PP1-8; July 1, 2016 to June 30, 2020) of the OCM. Aggregate spending stratified by 10 expenditure domains (e.g., Part B/D drugs, RO, etc.) and 21 disease sites was extracted from claims data. A subset analysis of RO expenditures was performed on 2,149 episodes from 2,033 patients treated with radiotherapy (RT). All expenses are expressed in per beneficiary, per episode (PBPE) terms indexed to average PBPE. <h3>Results</h3> Indexed to the average PBPE payment, average expenditures increased (P_trend < 0.001) from 92% in PP1 to a peak of 111% in PP7. Part B and D drugs were used in 87% and 23% of episodes, whereas RO services were used in 13%. Part B spending increased from 41.9% of PBPE expenses in PP1 to 45.6% in PP8 and Part D spending increased from 17.0% to 22.6%, whereas RO spending decreased from 2.6% to 2.4%. Physician services and in-hospital costs also decreased from 11.2% and 11.4% to 8.4% and 8.3%, respectively. By disease site, the largest PBPE expenses were for melanoma (234%), multiple myeloma (226%), and kidney cancer (191%), for which Part B/D spending accounted for 77%, 82%, and 81% of spending for each site, respectively. Among sites with the highest total expenditures, increases in Part B/D spending from PP1-8 were seen for breast (+11%), multiple myeloma (+11%), lung (+12%), and prostate (+7%), and chronic leukemia (+12%). Among sites with the highest RO spending, decreases in RO expenses were seen for breast (-1%), lung (-1%), and female genitourinary (-4%), while an increase was seen for prostate (+4%). On subset analysis, the average number of RT fractions per episode decreased from 19.2 in PP1 to 18.6 in PP8; this decrease was seen for breast (-2.1) and lung (-2.8) cancers but not for prostate (unchanged). Intensity-modulated RT charges accounted for 51% of RT spending and increased 5% from PP1-8, whereas 3D/electron external beam made up 21% and decreased 8%. Expenses for image guidance (17%; +2%), stereotactic RT (9%; +1%), radiopharmaceuticals (1.4%; +0.5%), and brachytherapy (1.4%; +0.5%) all increased. <h3>Conclusion</h3> The total cost of oncology care continues to rise, driven by increases in Part B and Part D drug spending. Conversely, RO expenditures were small and decreased on a relative basis over the study period. Future payment models directed at meaningfully managing the total cost of cancer care will need to prioritize high cost and high growth areas of spending, including novel drug therapies, while accounting for patient outcomes.

Association of Hospital Participation in Bundled Payments for Care Improvement Advanced With Medicare Spending and Hospital Incentive Payments

Bundled Payments for Care Improvement Advanced (BPCI-A) is a Centers for Medicare & Medicaid Services (CMS) initiative that aims to produce financial savings by incentivizing decreases in clinical spending. Incentives consist of financial bonuses from CMS to hospitals or penalties paid by hospitals to CMS. To investigate the association of hospital participation in BPCI-A with spending, and to characterize hospitals receiving financial bonuses vs penalties. Difference-in-differences and cross-sectional analyses of 4 754 139 patient episodes using 2013-2019 US Medicare claims at 694 participating and 2852 nonparticipating hospitals merged with hospital and market characteristics. BPCI-A model years 1 and 2 (October 1, 2018, through December 31, 2019). Hospitals' per-episode spending, CMS gross and net spending, and the incentive allocated to each hospital. The study identified 694 participating hospitals. The analysis observed a -$175 change in mean per-episode spending (95% CI, -$378 to $28) and an aggregate spending change of -$75.1 million (95% CI, -$162.1 million to $12.0 million) across the 428 670 episodes in BPCI-A model years 1 and 2. However, CMS disbursed $354.3 million (95% CI, $212.0 million to $496.0 million) more in bonuses than it received in penalties. Hospital participation in BPCI-A was associated with a net loss to CMS of $279.2 million (95% CI, $135.0 million to $423.0 million). Hospitals in the lowest quartile of Medicaid days received a mean penalty of $0.41 million; (95% CI, $0.09 million to $0.72 million), while those in the highest quartile received a mean bonus of $1.57 million; (95% CI, $1.09 million to $2.08 million). Similar patterns were observed for hospitals across increasing quartiles of Disproportionate Share Hospital percentage and of patients from racial and ethnic minority groups. Among US hospitals measured between 2013 and 2019, participation in BPCI-A was significantly associated with an increase in net CMS spending. Bonuses accrued disproportionately to hospitals providing care for marginalized communities.

The Rise of Niche Consumption: A Shopping Basket Similarity Approach

The rise of e-commerce and globalization has led to a surge in product variety. As a result, consumers are now able to purchase products that meet their specific needs and wants. A rise of such niche consumption may be evidenced by a long-tailed market share distribution, or falling aggregate spending concentration accompanied by rising consumer spending concentration. In this paper, I propose a more direct method to uncover whether consumers become similar or different in the products they spend more on. Using Nielsen's consumer panel data, I compute cosine similarity scores for each pair of household shopping baskets represented by the expenditure share distributions. I find the households' grocery baskets became increasingly different from one another from 2005 to 2019 regardless of whether products are defined narrowly or broadly. But, when products are broadly defined as brands, the aggregate and individual consumer spending concentration both rise from 2015 and on. This shows the consumer shopping basket similarity approach can unveil patterns of niche consumption even when consumer and aggregate spending concentration move in the same direction.