Effects Of Fiscal Measures Research Articles

Effectiveness of Fiscal Announcements: Early Evidence from COVID-19

This paper empirically examines the effectiveness of announced government fiscal measures in the context of the COVID-19 pandemic. First, we build a new panel dataset of fiscal announcements by type, such as above-the line, below-the-line, and contingent liabilities for a wide sample of 136 advanced and developing countries between January 2020 and May 2021. Then, using this newly constructed dataset, we show, using both static and dynamic panel analyses, how various types of fiscal announcements affect alternative proxies of economic activity and across different income groups. We also evaluate how these effects vary depending on the country’s initial conditions (degree of public indebtedness or the business cycle positioning). Fiscal announcements also matter in terms of external credibility since they have an effect on government bond spreads. Ultimately, our findings suggest why it might be critical to consider the “news” effect of a fiscal measure by type rather than at the aggregated level.

Government revenue in the wake of the pandemic. Tax residuals and inflation

Rationale Following the COVID-19 pandemic, tax revenue has shown strong dynamism, increasing as a proportion of GDP by 3.7 percentage points since 2019. Understanding the nature of this dynamism is key to assessing Spanish fiscal policy. Takeaways • This article breaks down revenue growth into four explanatory factors: real economic activity, price growth, the effect of fiscal measures and an unexplained component or tax residual. • The effect of prices (inflation) has been gaining weight and appears to account for somewhat more than half of the revenue growth observed in 2022, especially from VAT and personal income tax. • It is estimated that 2.6 percentage points of the 3.7 percentage point increase in the revenue-to-GDP ratio cannot be explained by the changes in economic activity, prices or the fiscal measures approved. In the absence of an explanation about the permanent or temporary nature of this phenomenon, the principle of prudence would advise against considering this increase in revenue to be permanent.

The Effects of Fiscal Measures During COVID-19

The Effects of Fiscal Measures During COVID-19

The Effects of Fiscal Measures During Covid-19

The Effects of Fiscal Measures During Covid-19

Effectiveness of fiscal measures in correcting the fiscal imbalances in India

Effectiveness of fiscal measures in correcting the fiscal imbalances in India

Public expenditure and Private investment: a study of the UK and the USA

The effect of fiscal measures on private investment is examined using variance decompositions derived from the error correction model. The empirical results of the study provide little support for the importance of fiscal measures in explaining variations of private investment. Output and profitability were the only two important variables in explaining forecast error variance of private investment in either country.

Do fiscal variables affect private consumption? Evidence from Australia and the United States

This study examines the effect of fiscal measures on real private consumption using an error correction model. On balance, the empirical results of the study provided some evidence against the Ricardian equivalence hypothesis. In particular, responses to real government consumption and taxes in the United States and responses to real government debt and transfer payments in Australia were significant with their dynamic paths moving opposite to Ricardian proposition.

THE ROLE OF FEDERAL FISCAL POLICY IN THE 1957-60 BUSINESS CYCLE*

THIS PAPER HAS a twofold purpose. The first is to evaluate the impact of federal expenditure and tax policies during the 1957-60 recession and recovery. The second is to explore the possible effect that alternative expenditure and tax policies might have had on economic stability during this period. The paper tries to answer two questions: What were the shortcomings of fiscal policy during the 1957-60 recession and recovery? To what extent might it be possible to remove these shortcomings in the future and therefore increase the effectiveness of fiscal measures as a countercyclical force? The analysis of 1957-60 fiscal policy will be carried out in Part II. It will be argued that the major shortcoming of this policy was the timing of discretionary expenditure measures. To a large extent, these discretionary measures were either not taken until the recession trough had been reached or, if they were taken before the trough, produced the great bulk of their effects after the trough. Relatively little scope appears to exist for increasing the built-in flexibility of the fiscal system, which, indeed, turned in a fairly good performance. The long lead time between the enactment of discretionary fiscal measures and their impact on public and private spending, however, poses a difficult problem in the effective use of the fiscal system as an instrument for combating recession. Part III of the paper attempts to assess three different approaches that have been urged as solutions to this problem of the long lead time of discretionary expenditures. These approaches are (1) the