Role Of Fiscal Policy Research Articles

<p>Using a quasi-natural experiment of the staggered construction of energy conservation and emission reduction (ECER) demonstration cities in China, this paper explores the impact of fiscal policy on green credit (GC) for listed enterprises. The main findings are the following: (1) The ECER demonstration cities policy significantly improves enterprise GC. This conclusion remains robust after considering the heterogeneous treatment effects. (2) By extending the estimation period beyond the policy withdrawal, we use the difference-in-differences designs with multiple groups and periods (DIDM) estimator to compute the average treatment effect of policy switches. The results show that the intervention effect still exists after the policy withdrawal. (3) Direct cash subsidies, corporate green spending, and external financing constraints are the main mechanisms through which the ECER demonstration cities policy works. (4) The effects of the ECER demonstration cities policy are heterogeneous at the batch, urban, industry, and corporate levels. This paper explores the role of fiscal policy on enterprise green financing. The findings provide theoretical and empirical insights for leveraging fiscal tools to enhance environmental governance.</p>

This investigation examines the evolution of Income Tax payments for individuals engaged in dependent employment in Ecuador over the years 2021, 2022, and 2023. Utilizing a descriptive and quantitative methodology, the study conducts a comprehensive review of the tax reforms enacted during this period, emphasizing the Organic Law of Simplification and Tax Progressivity, the Organic Law for Economic Development and Fiscal Sustainability post-COVID-19 pandemic, and the Family Economy Strengthening Law. The research centers on the impact of these reforms on the computation and payment of income tax, specifically addressing the elimination of personal expense deductions and the introduction of new rebates linked to the basic family basket and family dependents. The findings indicate a substantial increase in the tax liability for the year 2022 relative to 2021, attributed to the removal of deductions. Conversely, in 2023, the implementation of new rebates significantly mitigated the tax burden, particularly for taxpayers with family dependents. This analysis underscores the critical role of fiscal policies in ensuring the equity and efficiency of the tax system, providing a robust foundation for future reforms aimed at enhancing fiscal sustainability and taxpayer welfare.

This paper investigates the role of fiscal policy on financial development in Sub-Saharan African economies, drawing on a sample of 23 countries from 2000 to 2021 using the panel ARDL method after evidencing stationarity and co-integration properties among the variables. Our results show that an increase in fiscal policy and institutional quality decreases financial development in the long run. An increase in taxation and expenditure by the government affects the development of finance in SSA countries. Our results also show that an increase in foreign capital and industrial growth increases financial development in the long term. The outcome evidence that the interaction between fiscal policy and institutional quality exhibits a positive effect on financial development. Causality results reveal no directional link between fiscal policy, foreign capital, industrialization, and financial development with institutional quality indicating a single direction. The study suggested that SSA countries should focus on developing policies to track the implementation of adequate fiscal policy systems and structures. Institutional coherence within and between SSA nations is required for efficient fiscal policy development.

Monetary policy is an important component of the sustainability and development of the economy of modern countries. Its importance became more obvious in the 20th century, when many countries began to adhere to indirect methods of regulating the economies of countries, thereby weakening the role of fiscal policy in favor of monetary policy. The importance of monetary policy lies in the fact that it ensures the stability of the economy, thereby creating conditions for economic growth that will lead to economic development. However, digitalization is also penetrating this area, and now the countries needs to think about creating a digital currency in order to conduct an effective monetary policy.

Unregulated economic activities and the environment: The role of fiscal policies

PurposeThis study aims to examine the impact of fiscal space and governance quality on inclusive growth in African countries.Design/methodology/approachIn total, 28 African countries were analyzed from 2000 to 2020 using the generalized method of moment regression method. An inclusive growth index was developed using the principal component analysis (PCA) method. The PCA-derived index incorporates factors such as poverty, income inequality, economic participation and per capita income.FindingsThe main findings suggest that fiscal space availability (de facto fiscal space and fiscal balance) promotes inclusive growth. The study also showed that lagged inclusive growth, digitalization and governance indicators positively influence inclusive growth. The study concludes that fiscal space availability fosters inclusive growth, but this effect is mediated by governance quality in Africa.Originality/valueSeveral studies examined the role of fiscal policy on inclusive growth. However, it is crucial to assess the fiscal space, that is, the financial capacity of the government to implement its fiscal policy without harming its financial stability. This paper, therefore, contributes to the existing literature by using de facto fiscal space indicator to comprehend fiscal dynamics contributing to inclusive growth. In addition, the paper uniquely constructs an inclusive growth index by including poverty severity, which considers both the incidence and depth of poverty and inequality in society.

This study aims to analyze the relationship between financial policy and human development is one of the most prominent concerns of the modern era, as it is a way to know the impact and role of financial policy in the human development process, The main purpose of the research is to know The role of fiscal policy in human development the current study is looking for the future of human development in light of the developments that occurred in Iraq after 2003, Analysis of the reality of fiscal policy in Iraq.

The strengthening of the role of fiscal policy in Kazakhstan in recent years has updated studies of the impact of its instruments on the economy. In this regard, the assessment of the fiscal multiplier is an important research task that has practical significance for increasing the effect of fiscal policy. The purpose of this article is to estimate the fiscal multiplier in Kazakhstan. The quarterly data for the period from 2000 to 2022 from the official statistical sources of information were used. For the specified time period, the authors made two distinct estimates of the fiscal multiplier of Kazakhstan’s public expenditures: with and without considering economic cycles. The comparison of the simulation results allowed the authors to note the shortcomings of the fiscal multiplier estimation without considering economic cycles. In the cycle-ignoring model, the lag of government spending shock was overestimated. Moreover, the fiscal multiplier without cycles turned out to be significant at the 10% significance level and amounted to only 0.2. The fiscal multiplier in the model with cycles during the recession period turned out to be significant at the 1% significance level and amounted to 0.44, and during the expansion period,, it turned out to be insignificant for any lag. Based on these results, the authors conclude that the theoretical importance of fiscal measures in a recession is confirmed for Kazakhstan. However, during a period of economic growth above the potential level, an additional positive shock of government spending will not lead to positive effects on the economic growth.

In the rapidly evolving landscape of contemporary China, urban centers have emerged as focal points of a significant environmental challenge—carbon emissions. This comprehensive study delves into an intricate analysis, utilizing data gathered from 140 prefecture-level cities across China. Its principal aim is to dissect the effectiveness of strategies aimed at carbon reduction and fiscal policies within the multifaceted canvas of China’s urban metamorphosis, where the pursuit of high-caliber economic development takes precedence. The findings can be succinctly summarized as follows. Firstly, a statistically significant inverse correlation exists between high-quality economic development and carbon emissions in China’s urban centers. Secondly, when comparing resource-based cities to their non-resource-based counterparts, the former’s high-quality economic development plays a more prominent role in fostering carbon emission reduction. Finally, fiscal policies emerge as pivotal “accelerators” for advancing carbon emission reduction through high-quality economic development. However, their efficacy exhibits notable variations. It is essential to note that the moderating effect of environmental protection expenditures lacks statistical significance in resource-based cities and northern cities. Furthermore, the regulatory influence of resource taxation in southern cities is yet to be firmly established. This study provides practical policy recommendations for optimizing China’s eco-friendly fiscal system. These recommendations not only contribute to the realization of a green transition model for economic development but also serve as a valuable reference for governmental design of carbon emission reduction policies.

This paper presents the results of ridge regression analysis of the relationship between government spending in emancipation programmes and multidimensional poverty, focusing on South Africa. Through the Principal Component analysis, we retained three variables of this relationship, affected by a range of factors, to determine the size and direction of the relationship. Besides health, we find no clear evidence that government spending on housing and social security significantly reduces multidimensional poverty. Co-production in housing, healthcare delivery, and social security should be encouraged.

Studying the role of fiscal policy to utilize natural resources development: Leads to sustainable development goals

The adoption of a “makeup” strategy has been one of the proposals in the review of the Fed’s monetary policy framework. Another suggestion, to avoid the zero lower bound, has been a more active role for fiscal policy. We put together these ideas to study price level targeting under a fiscally-led regime. We find that following a deflationary demand shock: (i) the central bank should increase (rather than decrease) the policy rate; (ii) the central bank, thus, avoids the zero lower bound; (iii) price level targeting is welfare improving with respect to inflation targeting, unless one considers a nonstandard inflation targeting rule with a negative inflation coefficient and a high degree of smoothing.

Debt hierarchy: Autonomous demand composition, growth and indebtedness in a Supermultiplier model

IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Abstract India is the second most populous country in the world and stood at seventh rank in a major climate risk index in 2019, which is a grave concern for the Indian government, policymakers and environmentalists. Therefore, the present study examines the role of fiscal policy and monetary policy instruments along with select macroeconomic variables on carbon emission in India over the period 1971–2019 in the non‐linear framework. The outcome of the study reveals that the impact of fiscal and monetary policy instruments on carbon emission is asymmetric in nature. In addition, the positive and negative shocks in fiscal and monetary policy instruments have a positive and negative impact on carbon emissions, respectively. Based on the coefficients’ magnitude, the role of fiscal policy instruments has a more prominent effect on carbon emissions than monetary policy instruments. The findings of the study imply that the Indian government is required to implement green fiscal and monetary policies. Use fiscal policy to implement a ‘green tax ratio’ and a ‘green subsidy programme’ for manufacturers and investors to reduce CO2 emissions. A ‘green lending programme’ should be introduced for commercial banks by implementing monetary policy via the central bank.

Testing the Mediating Role of Fiscal Policy in the Environmental Degradation in Portugal: Evidence from Multiple Structural Breaks Co-integration Test

Tax expenditures are of interests to researchers and practice-makers because of their implications for government policy goals; however, the lack of homogeneity in tax expenditures data lead to remarkable limitation on the number of research on this topic (Dom & McCulloch, 2019; von Haldenwang, Redonda, & Aliu, 2021). As the world confronts the COVID-19 pandemic, tax expenditures are back to being a contemporary topic, discuss the role of fiscal policies in financing inclusive development or post-pandemic recovery requirements (De Mooij, Fenochietto, Hebous, Leduc, & Osorio-Buitron, 2020; Dom & McCulloch, 2019; Harman et al., 2021). On the basis of secondary data analysis, this article focuses on analyzing aspects of Vietnam’s tax responses in the period of 2019 - 2022 in order to draw a picture of Vietnam using fiscal tools to support recovery during the Covid-19 pandemic. The article finds similarities between Vietnam’s tax expenditures and the global context, which is their importance during the Covid-19 period along with the limitations of systematic statistical data.

The Role of Fiscal Policy in Achieving Internal Balance in Iraq After 2003

Introduction/Main Objectives: This study aims to determine fiscal policy in dealing with the economic recession due to Covid-19 in Indonesia. Research Methods: This study uses qualitative methods and a library research approach. Finding/Results: This study's results prove that fiscal policy's role is vast in helping to deal with the economic recession in Indonesia due to Covid-19. The Government succeeded in implementing fiscal policy on state revenues and expenditures to maintain economic growth and economic stability. Fiscal policies implemented by the Government to improve the Indonesian economy during the pandemic, including refocusing and revising the 2020 State Budget as an efficiency measure for state spending, rearranging the allocation of state revenues in the 2020 State Budget, a tax incentive program to relieve taxpayers, revising tax revenue targets, and implementing digital taxes for activities through electronic media. Fraud is still found in these policies, so the Government needs to re-evaluate. Conclusion: This study is expected to become the latest source of information for those who need it in the future.

Fiscal policy is an essential tool that policymakers use for guiding the economy. Thus, the effects of fiscal policy may affect many aspects of our lives, including the impact of carbon dioxide (CO2) emissions. This article investigates the role of fiscal policy, in addition to gross domestic product (GDP), innovation, and financial development, in mitigating CO2 emissions in the context of the Environmental Kuznets Curve theory in the Group of Twenty (G20) countries from 1995 to 2019. The study implied the autoregressive distributed lag of pooled mean group (ARDL-PMG) approach to analyze the suggested model. The results revealed the validity of the model for the G20 countries, as well as a long-run cointegration between the study variables. The results also showed that fiscal policy is associated positively with CO2 emissions. Hence, we recommend reconsidering the applied financial policy, redirecting it to support clean energy projects, provide incentives for projects combating environmental degradation, and relying on environmentally friendly energy.