Government Fiscal Policy Research Articles

Bitcoin: an alternative to fiat money? A post-Keynesian perspective

Motivation: This paper addresses the ongoing debate surrounding Bitcoin’s potential to function as an alternative to state-issued fiat currencies. With the advent of Bitcoin and its increasing global prominence, it is essential to explore its viability, particularly in light of its formal adoption in El Salvador as legal tender. The limited supply and decentralized nature of Bitcoin present a significant departure from traditional monetary systems, which raises questions regarding its capacity to fulfill the roles of money under Modern Monetary Theory (MMT).Aim: The primary goal of this paper is to critically examine whether Bitcoin can serve as a functional replacement for fiat money. Using a post-Keynesian analytical framework, this study investigates Bitcoin’s ability to meet the requirements of sovereign money, particularly within the theoretical framework of MMT. The analysis focuses on Bitcoin’s decentralized issuance, limited supply, and its role in fiscal policy and credit creation.Materials and methods: This research employs a critical literature review and a case study analysis, using the framework of MMT and post-Keynesian endogenous money theory to assess Bitcoin’s economic implications and its real-world application in El Salvador’s Bitcoin Law. The study analyzes Bitcoin’s economic implications based on the endogenous money supply model and evaluates its impact on government fiscal policy, credit markets, and economic stability in both theoretical and practical contexts, with a special focus on El Salvador’s Bitcoin Law.Results: The analysis reveals significant limitations in Bitcoin’s ability to function as a fiat currency. Its rigid supply and speculative nature hinder its capacity to serve as a medium of exchange, store of value, and unit of account, as envisaged by MMT. The study concludes that Bitcoin’s decentralized nature and deflationary design pose challenges for its broader adoption as state money, particularly in managing aggregate demand and economic crises.

Effectiveness of implemented global dietary interventions: a scoping review of fiscal policies

BackgroundAlthough the World Health Organisation (WHO) has proposed the use of fiscal policies to mitigate consumption externalities such as overweight and obesity-related diseases, very little is known about the impacts of the different types and framing of national and/or regional fiscal policies that have been implemented over the years. There is the need to provide up-to-date evidence on the impact of fiscal policies that have been enacted and implemented across the globe.MethodsWe conducted a scoping review of all implemented government fiscal policies in the food and drinks sector to identify the different types of fiscal policies that exist and the scope of their impact on consumers as well as the food environment. Electronic databases such as the Web of Science and Google Scholar were used to search for appropriate literature on the topic. A total of 4,191 articles were retrieved and 127 were synthesized and charted for emerging themes.ResultsThe results from this review were synthesized in MS Excel following Arksey & O’Malley (2005). Emerging themes were identified across different countries/settings for synthesis. The results confirms that fiscal policies improve consumers’ health; increase the prices of foods that are high in fats, sugar, and salt; increase government revenue; and shift consumption and purchases towards healthier and untaxed foods.ConclusionGovernments already have the optimum tool required to effect changes in consumer behaviour and the food environment.

Influence of Government Fiscal policy Toward Economy Development

Influence of Government Fiscal policy Toward Economy Development

Fiscal and monetary policy regimes: New evidence from India

The paper examines how fiscal and monetary policy coordination in India stabilizes macroeconomic fundamentals. We consider two coordinating fiscal and monetary policy regimes, the “Indian Fiscal” (IF) and M regime and then examine the transmission of public expenditure (PE) shock across these regimes. Monetary policy in the IFregime supports fiscal policy in debt stabilization by reducing interest rates. The M regime fiscal policy supports monetary policy in curbing inflation through fiscal consolidation drives. The IF regime is more conducive to the Indian economy as PE stimulus accelerates economic activity without causing high inflationary and high debt scenarios. In contrast, the M regime has a crowding out effect on PE stimulus while worsening the government's fiscal space. The findings indicate that in the Indian case, the monetary authority should maintain its accommodative stance on PE stimulus.

Navigating the Nexus of Tax Avoidance and Strategic Planning: Insights and Strategies

Tax avoidance and tax planning are two concepts often discussed in the context of corporate governance, financial management, and government fiscal policy. While both aim to minimize tax liabilities, they differ significantly in their legality, ethical considerations, and long-term implications. Tax planning involves strategic decisions within the bounds of tax laws to optimize tax efficiency, ensuring compliance while maximizing benefits for stakeholders. In contrast, tax avoidance exploits loopholes or ambiguities in tax laws to reduce tax burdens, sometimes pushing the boundaries of legality and ethical standards. This abstract explores the distinctions between tax planning and tax avoidance, their impacts on financial transparency, corporate social responsibility, and regulatory responses worldwide. Understanding these distinctions is crucial for policymakers, corporations, and taxpayers navigating the complexities of modern taxation systems. This paper is a humble effort to understand the concept of ‘Tax Evasion’ and ‘Tax Planning’ difference between these two concepts. It also explores how can existing legal aids be made more accessible and reap better results.

Macroeconomic Policy Adjustments on Environmental Protection Effectiveness Research - Based on the DSGE Model

Through the dynamic stochastic general equilibrium model (DSGE model), this article explores the balance between economic development and environmental protection, focusing on the in-depth mutual influence among economic agents such as households, banks, producers, and government in promoting economic growth and achieving environmental protection. The model comprehensively considers factors such as production technology, carbon tax policies, bank loan rates, and government fiscal policies, aiming to analyze the specific impacts of these factors on economic growth, environmental protection, and social welfare. By detailed settings and analysis of consumption, savings, and labor supply decisions of households, the financial intermediary role of the banking sector, and carbon emissions and environmental technology use in the production sector, this study provides theoretical support for an environmentally friendly economic growth path. Through policy analysis, this article reveals the short-term and long-term effects of positive technological shocks, taxation on energy firms' loan rates, carbon tax policies, and government spending on the economy and the environment, providing a theoretical basis and reference for formulating relevant economic and environmental policies. The results indicate that appropriate macroeconomic policies can effectively promote economic growth while reducing carbon emissions and enhancing social welfare.

Assessing Fiscal Policies’ Impact on Economic Recovery in African Nations Amid Financial and Pandemic Crises

This study investigates the impact of government fiscal policies on economic recovery in African nations amidst financial and pandemic crises. Through regression analysis and empirical evidence synthesis, it explores the dynamics of taxation revenue, non-taxation revenue, and government capital formation expenditure in driving resilience and growth. The findings underscore the critical role of effective fiscal policies in navigating crises, highlighting the need for evidence-based strategies to enhance economic recovery and development. Theoretical underpinnings rooted in Keynesian Economic Theory provide a robust framework for understanding the efficacy of fiscal interventions in fostering sustainable growth. The study contributes to theoretical refinement and offers practical insights for policymakers seeking to formulate adaptive fiscal strategies tailored to the unique socio-economic dynamics of African countries. Recommendations include prioritizing revenue generation strategies, enhancing tax compliance, optimizing non-tax revenue sources, and strategic investments in capital formation to foster long-term growth and resilience.

Pengaruh Penerapan Sistem Informasi Pengelolaan Keuangan Daerah (SIPKD), Kompetensi Sumber Daya Aparatur (SDA), Dan Penerapan Sistem Pengendalian Intern Pemerintah (SPIP) Terhadap Kualitas Laporan Keuangan Pemerintah Daerah (LKPD) Provinsi Bali

The Regional Government Financial Report is a Financial Report consisting of several SKPD Financial Reports submitted by the Regional Government through the Regional Secretary to the Regional Head and DPRD in order to account for the implementation of the APBD and regional government fiscal policy making. Based on the Audit Results Report on the Bali Provincial Government's Financial Reports carried out by the Bali Provincial Representative Financial Audit Agency for the last five years, it is stated that the Bali Provincial Government's Financial Reports received a WTP Opinion, however there are several notes that the Bali Provincial Government must pay attention to when preparing the Financial Reports. Regional Government the following year. This study aims to determine the effect of the Implementation of the Regional Financial Management Information System (SIPKD), the Competence of Apparatus Resources (SDA), and the Implementation of the Government Internal Control System (SPIP) on the Quality of Regional Government Financial Reports (LKPD) of Bali Province. The population used in this study were all Civil Servants (PNS) who worked in the Finance section of the Bali Provincial Government. The sample in this study were 116 respondents who were determined based on the purposive sampling method. The data used in this study is primary data, namely the survey method using a questionnaire. The analytical tool used is multiple linear regression. The results of the study show that the application of the Regional Financial Management Information System (SIPKD), the Competence of Apparatus Resources (SDA), and the Implementation of the Government Internal Control System (SPIP) have a positive effect on the Quality of Regional Government Financial Reports (LKPD) of Bali Province.

EFFECT OF DEPOSITS AND NON-PERFORMING LOANS ON BANK PROFITABILITY – A CASE STUDY ON CONVENTIONAL COOPERATIVE BANK OF BARODA REGION

The banking sector plays a vital role in providing essential financial services, facilitating the allocation of funds to productive ventures, and aiding in the implementation of government fiscal and monetary policies. Historically, Non-Performing Assets (NPAs) have posed significant challenges for banks, but reducing NPAs has now become a top priority. The strength of a nation's economy relies heavily on the health of its cooperative banking sector. This study analyzes the non-performing assets (NPAs) of The Pragati Co-operative Bank Ltd. over a six-year period from 2017-18 to 2022-23. The research examines various aspects related to NPAs, including gross NPAs, net NPAs, provisions made towards NPAs, loans and advances, deposits, and relevant ratios such as net NPA ratio, provision coverage ratio, and credit-to-deposit ratio. The data analysis reveals that the bank maintained a zero net NPA throughout the period, indicating effective provisioning strategies. While gross NPAs fluctuated, the provision coverage ratio remained strong, suggesting the bank's ability to withstand asset quality pressures. The study also investigates the relationship between gross NPAs and net profits using correlation and regression analysis, finding a positive correlation but minimal significant impact of gross NPAs on profitability. Overall, the research highlights The Pragati Co-operative Bank Ltd.'s proactive approach to NPA management, financial stability, and adaptability to changing market conditions.

Understanding the Coupling Coordination Between the Digital Economy and High-Quality Development in Henan, China

Abstract China is advancing its economic agenda by shifting from a resource and energy-intensive framework to one centered on digitalization and innovation, highlighting the digital economy as a cornerstone for sustainable, high-quality development. The coordinated development of the digital economy with high-quality development strategies is pivotal for achieving balanced regional growth. This analysis delves into these dynamics within Henan Province, utilizing sophisticated analytical tools such as the Entropy entropy-weighted topics method, Coupled Coordination Model, Dagum Gini coefficient, and panel Tobit regression to evaluate the spatial-temporal interplay and disparities in development, along with identifying critical determinants. The results indicate a nuanced landscape of coordination between the digital economy and high-quality development across Henan. The province exhibits a pattern of strong coupling but only moderate coordination, with distinct regional variations. Development is more pronounced in the western and northern regions compared to their eastern and southern counterparts, with Zhengzhou, emerging as a strategic center from which development radiates outward, progressively lessening from west to east and from north to south. Furthermore, while initial disparities between cities were relatively small, they have widened over time, with the most significant differences manifesting between various city groups. This divergence follows a distinct pattern, most markedly from west to north to south to east. Additionally, the study identifies that while the degree of digitalization positively correlates with enhanced coordination, factors such as economic robustness, government fiscal policies, and innovation capacity appear to impede it. Based on these findings, the study concludes with targeted strategic recommendations for policymakers. These recommendations aim to mitigate the development disparities and foster an integrated advancement of both the urban digital economy and high-quality economic growth across Henan Province.

GOVERNMENT'S STRATEGY TO OVERCOME THE IMPACT OF FISCAL AND MONETARY POLICY ON THE INDONESIAN ECONOMY

The government's strategy was previously under pressure to improve the economy, one of which is the implementation of fiscal policy. This is because the Covid-19 pandemic in previous years had an impact on all sectors, especially the financial sector. Now with its fiscal policy adjusting between government revenue and spending. Part of the government's fiscal policy during the pandemic, namely the tax relief program aimed at easing the burden on taxpayers and reorienting the 2020 State Budget to increase government spending. Through in-depth research and analysis of the government's strategy for overcoming the impact of fiscal and monetary policies on the economy, it is hoped that a better understanding of government actions in encouraging inclusive and sustainable economic growth in the Indonesian economy will be provided.

Environmental Factors and Bank Performance In Nigeria: A Panel GMM Approach

Purpose—This paper examines the impact of various environmental factors on the performance of banks in Nigeria. Specifically, the study analyzes how exchange rates, GDP growth, government expenditures, and interest rates influence the performance of selected Deposit Money Banks (DMBs) in Nigeria. Design/methodology/approach—The study uses annual data sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and the annual reports and accounts of 12 randomly selected DMBs for the period from 2009 to 2018. The Panel Generalized Method of Moments (GMM) approach is employed to estimate the relationships between environmental factors and bank performance. Findings — The research finds that GDP growth, interest rates, and government expenditure all have a positive and significant impact on the performance of banks. Among these factors, government expenditure has the most substantial effect on the earnings per share (EPS) of the selected banks. Practical implications — Based on the findings, it is recommended that banks should manage their interest rates creatively within legal constraints to enhance performance. Banks should also pay close attention to government fiscal policies, especially expenditures, and incorporate these into their strategic decision-making. Additionally, banks are encouraged to develop policies, products, and services that support economic growth in Nigeria, potentially through development finance initiatives. Originality/value—This study uses a robust panel data approach to provide valuable insights into how environmental factors affect bank performance in Nigeria. By highlighting the significant role of government expenditures and other factors, it offers practical recommendations for banks to improve their performance and align their strategies with macroeconomic conditions. This research contributes to understanding banking performance in emerging economies, particularly within the context of Nigeria.

Impact of Government Investment and Chinese Investment on Economic Growth of Pakistan.

The research aims to evaluate the impact of government development expenditure and Chinese foreign direct investment on Pakistan's economic growth from 1980 to 2020. The data sample used in the study was sourced from the World Bank database and the Pakistan Board of Investment Publications. The dependent variable was GDP growth, while the independent variables were Chinese foreign direct investment, CFDI government development expenditure, and Gross Domestic Product (GDE). The study used various tests, including Unit root test, Autoregressive Distributed Lag, Error Correction Model, White test, lag selection criterion, Akaike Information Criterion (AIC), and Granger Causality Test. The study found that Chinese investment and GDE have a positive impact on Pakistan's economic growth in the short run, while negatively affecting it in the long run. The positive relationship between CFDI government development expenditure and GDP growth is present in both the short and long run, as government fiscal policies in favor of Chinese investment aim to increase investment inflow. GDE stimulates CFDI, resulting in a positive impact on GDP growth.
 The study was divided into two sub-period groups to analyze the relationship before and after the sharp decline of CFDI in pre-2007 and post-2007 sub-periods. In pre-2007, CFDI and GDE helped in economic growth with a negative relationship between CFDI and GDE. After the dramatic decline in 2007, the relationship changed, with GDE having a positive effect while CFDI negatively affected economic growth with a negative relationship in CFDI*GDE.
 These findings are valuable for policymakers and the government to formulate effective economic policies for Pakistan's economic development and are insightful for foreign investors to understand the trend.

Monetary policy of the National Bank of Ukraine: radical changes are needed

The article analyzes the effectiveness of the NBU's monetary policy. During the period of independence, the National Bank never performed any of the functions stipulated by law. The main instruments of monetary and credit policy at the disposal of the central bank are not used as intended, and therefore do not ensure the performance of the functions entrusted to the National Bank of Ukraine, in particular: they do not ensure the stability of the hryvnia exchange rate, price stability, accelerated socio-economic development of the state and the adopted inflation level. The monetary and credit policy of the National Bank must be radically changed to ensure the implementation provisions of Art. 6 of the Law of Ukraine ‘On the National Bank of Ukraine'. The central bank's efforts must be coordinated with the government's efforts, and the central bank's monetary policy must be coordinated with the government's fiscal policy. In the paper, we propose to change the monetary policy instruments of the NBU in order to direct it to the support of the real sector of the economy and the stability of the exchange rate. The proposed changes provide for the establishment of refinancing rates up to 2%, placement of deposit certificates -2% (minus 2%). At the same time, it is necessary to make changes to the Tax Code of Ukraine regarding the introduction of progressive floating rates of taxation of the profit of financial institutions, limitation of the right to deduct losses from the tax base of financial institutions in certain cases. . . For the actual production of goods with a high added value, provide the reduction of the tax base for the part invested in production, and set the tax rate for the distributed part of the profit at the level of the personal income tax rate. Non- traditional methods of stimulating development are also proposed, in particular the purchase of government securities. The marginal value of government debt securities should be limited to 2-3% of GDP.

Intertemporal substitution in labor supply: A meta-analysis

The intertemporal substitution (Frisch) elasticity of labor supply governs how structural models predict changes in people's willingness to work in response to changes in economic conditions or government fiscal policy. We show that the mean reported estimates of the elasticity are exaggerated due to publication bias. For both the intensive and extensive margins the literature provides over 700 estimates, with a mean of 0.5 in both cases. Correcting for publication bias and emphasizing quasi-experimental evidence reduces the mean intensive margin elasticity to 0.2 and renders the extensive margin elasticity tiny. A total hours elasticity of about 0.25 is the most consistent with empirical evidence. To trace the differences in reported elasticities to differences in estimation context, we collect 23 variables reflecting study design and employ Bayesian and frequentist model averaging to address model uncertainty. On both margins the elasticity is systematically larger for women and workers near retirement, but not enough to support a total hours elasticity above 0.5.

Analysis of the Impact of Government Fiscal and Monetary Policies on Economic Growth in Indonesia: Government Economic Approach

Government economics is the study of how government policies influence a country's economic activities. In this case, fiscal and monetary policies are the two main instruments used by the government to control economic growth. In Indonesia, fiscal and monetary policies are used to increase economic growth and overcome economic problems faced by the country. Qualitative methods that can be used in this research are case studies or field research. This research aims to analyze the influence of fiscal and monetary policy on economic growth in Indonesia. The research results show that fiscal and monetary policies have a significant effect on economic growth in Indonesia. Fiscal policy, as measured by the ratio of government debt to GDP and government spending, has a positive influence on economic growth. that fiscal and monetary policies have a significant influence on economic growth in Indonesia. Fiscal policy, particularly government spending on infrastructure projects and social programs, has a positive impact on economic growth. Meanwhile, monetary policy, such as interest rate policy and banking regulations, has a less significant influence.

The Berlin puzzle: Why European solidarity prevailed in the adoption of the Corona recovery fund

AbstractIn light of the German government's long‐held preference against EU‐wide fiscal burden‐sharing, a hallmark of the Euro crisis, its support for an EU‐wide debt‐instrument during the COVID‐19 pandemic constitutes a dramatic policy U‐turn. To make sense of the ‘Berlin puzzle’, we develop a theoretical mechanism that explores why an initially reluctant German government heeded to the call for transnational fiscal solidarity: First, to avoid a ‘common bad’ of a large‐scale economic contraction, proposals for an EU‐wide fiscal response became a political imperative. Second, the successful framing of the crisis as ‘nobody's fault’ rendered the call for European solidarity as the dominant standard of legitimacy to which all governments subscribed. Third, governments whose preferences were not aligned with this standard faced mounting normative pressure and isolation. As a result, governments changed their positions, but not their preferences. We probe this mechanism by carrying out a process‐tracing analysis of the German government's fiscal policy U‐turn in the crucial months preceding the adoption of the Next Generation EU (NGEU) recovery plan in July 2020. The paper contributes to the growing literature on fiscal burden‐sharing in the EU by demonstrating when and how member states can change their stance on transnational fiscal burden‐sharing.

An Empirical Analysis of the Effects of Chinese Government Fiscal Policy on GDP Growth based on data frequency

This paper offers an empirical analysis of the effects of fiscal policy on economic growth. We use vector auto regression technique（VAR-SVAR）to distinguish stabilizing，discretionary and promoting effects of government fiscal variables in China on its GDP growth based on data frequency. The variables used here are government expenditure, tax revenue, and GDP, and the index for all these variables are monthly, quarterly and annually time series data, among them annually data covering the period of 1952 to 2022 and monthly, quarterly data covering from 1998-1 to 2022-4. The empirical results indicate that the effects of Chinese government fiscal policy do exist and the GDP growth systematically react to the changes of these fiscal variables. But the effects based on monthly, quarterly data and annually data are different especially on promoting effect, this is something should be studied further more.

The Impact of The Zimbabwe Government's Fiscal Policy on The Destruction of The Country's Economy

This political economy study in international relations explains the impact of the government's fiscal policy on foreign loans to the IMF in 2020. The fiscal policy carried out by the Robert Mugabe government has negatively impacted Zimbabwe's economy. The land reform policy was carried out to forcibly take land belonging to white farmers and give it to supporters of Robert Mugabe's political party. The land reform policy reduced economic growth and experienced hyperinflation, and as a result, the IMF suspended aid for Zimbabwe's foreign loans. This study aims to explain the impact of land reform policies on IMF foreign loans in 2020 and describe their impact on the Zimbabwean economy. The object of this research is land reform policies in Zimbabwe. This qualitative research uses descriptive methods and collects data from books, journals, official publications, and relevant websites. This paper uses a behavioralist perspective and the theory of international economic cooperation by Anne Kruenger, Deepak Lal. The results showed that hyperinflation in Zimbabwe was terrible for society, and the IMF decided to make economic aid to Zimbabwe worse.

Government Fiscal Policy and Foreign Direct Investment in Nigeria: An Application of VAR Model

Purpose: The aim of this paper is to examine the impact of key fiscal policy variables (government capital expenditure, government revenue, government recurrent expenditure, external debt and tax revenue) on foreign direct investment and to check if there exists a causal relationship between fiscal policy and Foreign direct investment in Nigeria. Approach/Methodology/Design: Times series Econometrics methods such as Vector Autoregressive (VAR) Model, unit root test, cointegration test, Lag selection test and Granger causality test on annual data obtained from CBN statistical bulletin and National Bureau of Statistics spanning 1985 to 2020 were used. Findings: The results of the unit root test showed that FDI, government capital expenditure, government revenue and tax were stationary at order one (1), while recurrent expenditure and external debt were stationary at order zero (0). Also there exists co-integration among all the variables in the model. The findings showed that fiscal policy has insignificant impact on foreign direct investment in Nigeria. Originality/value: The results of this paper give valuable information on the relationship that fiscal policy may have with foreign direct investment and a need for a well-articulated and coordinated fiscal policy to attract FDI in Nigeria for optimum growth and development.