Stimulus Policies Research Articles

Integrasi Ekonomi Asia: Solusi Asia Menghadapi Krisis Global 2008

No economies throughout the region managed to escape from the "global economic crisis in 2008" that was initiated in the United States. This is a logical consequence of the global economy that has been rolling along. The world economy is increasingly becoming more integrated and interdependent with one another. Exposure stems from the economic crisis in the prolonged United States subprime mortgage financial crisis, and eventually dragged the European economy, and also Asia. The Asian region was only affected, but even if only the impact of course, was enough to overwhelm the Asian region since the crisis has a major impact on a country's foreign exchange reserves. Therefore, after the G-20 summit held in Washington on November 15, 2008, the three major Asian countries, namely China, Japan and South Korea held a summit in Fukuoka Japanese initiative, which was attended by the three heads of government. This summit was to bring fresh air for the Asian region, because in addition to having a positive impact on Asian stocks, it also provides a new self confidence that Asia has formed an alliance that would at least fortify themselves (region) with the resulting stimulus policy. This initiative to find a solution is eventually expanded, and was welcomed by ASEAN countries, known as ASEAN Plus Three. Since in Asia there is already the East Asia Summit (East Asia Summit), the negotiations and the name of the group changed into the 6 partner countries of ASEAN. These six countries are Japan, China, South Korea, Australia, New Zealand, and India.

Discretionary deficit and its effects on Japanese economy

This paper identifies the discretionary component of Japan's public deficits, which is included in the structural component in existing work. The identification is done by collecting data and information of stimulus packages. Discretionary expenditure, discretionary revenue, and cyclical revenue are the main factors of increases in public deficits in the 1990s. The revenue side has had greater impacts on deficits than expenditure. The effects of stimulus packages are examined, using the discretionary deficits. Stimulus policies have multiplier effects, while overall public deficits have not. Results of analyses indicate that: (1) stimulus packages have economic effects, (2) they also bring fiscal deficits, thus can be additional constraints on the government budget, (3) public deficits can be eased with GDP growth if tax is returned to the previous level, (4) the public finance has a structural deficit.

Managing in the public sector for investment and growth

This article will focus on the central role played by imperfect or incomplete markets in the spread and perpetuation of recessionary situations. It is a known fact that demand volatility perpetuates such situations, and this can only be mitigated by sustainable economic stimulus policies. Macrofiscal rules, which are important for enhancing the tarnished credibility of State action, need to combine two basic principles: responsibility and stability. This means preserving regulation mechanisms so that excessive macroeconomic fluctuations can be stabilized. The best thing the authorities can do is to use flexible intervention policies to prevent such fluctuations. The new paradigm of public management by results thus entails setting clear fiscal rules with medium-term targets and short-term stabilization capabilities, but it must also involve allocating a larger and larger proportion of public expenditure on a multi-year basis. In seeking to combine stable economic growth with proper implementation of the plans and programmes voted for by citizens, public management faces three essential challenges: adhering to a macrofiscal rule over the cycle, identifying structural deficits as they arise, and correcting the traditional bias against investment. This article will look at some recent efforts to deal explicitly with these serious obstacles by applying legal provisions designed to cope with the uncertainties that surround both the cyclical behaviour of the economy and calculations of its long-term growth potential.

Politics, Pressure, and Economic Policy: Explaining Japan's Use of Economic Stimulus Policies

While supplementary budgeting has long been part of the Japanese fiscal cycle, substantive and procedural aspects of the process have changed. First, since the late 1970s, supplementary budgets have been used to fund government economic stimulus efforts (keizai taisaku), and second, since the late 1980s, these budgets have been assembled several months after the announcement of the actual stimulus packages. Such stimulus policies do not fit the prevailing model of the Japanese electoral business cycle, which emphasizes the targeting of benefits by the Liberal Democratic Party (ldp) at its constituents at election time. This article addresses this anomoly by developing a theory of how governing parties use the economic policy process to serve their electoral interests, particularly through broadly gauged policies designed to improve macroeconomic conditions. The authors amend the prevailing model to allow an adequate test of their electoral theory to be conducted. The results suggest that Japanese economic stimulus policies were the result of governing parties' attempts to expand their support at election time and to satisfy U.S. pressure to usefiscalpolicy to stimulate domestic demand.

Implications of the Malaysian Experience on Future International Financial Arrangements

I. Introduction In responding to the East Asian crisis, Malaysia took a different route from the other affected countries. At the onset of the crisis, Malaysia adopted policies similar to the other crisis-hit economies, namely tight monetary and fiscal policies and floating of the exchange rate. Despite these remedies, the economy continued to deteriorate and the exchange rate remained volatile, thus pushing the Malaysian Government to look for alternative measures. From the First Quarter of 1998, response to the crisis was directed towards the easing of monetary policy and introduction of fiscal stimulus but these measures were implemented in the middle of 1998. To stabilize the sinking exchange rate, Malaysia implemented selective capital controls in September 1998, pegged the ringgit to the U.S. dollar and restricted short-term capital flows. Initially, Malaysia's action was condemned but international opinion has changed somewhat during this recovery period. The debate is whether the Malaysian experience can provide a lesson for other small open economies (which are overwhelmed by huge short-term capital flows) or it is a just case of one country defying the global trend. This article is organized as follows. Section II summarizes the impact of capital inflow on Malaysia. Section III details the selective capital controls measures taken, and Section IV discusses the offshore market for Malaysian securities as well as the offshore ringgit market. Section V analyses the result of the recovery measures taken by Malaysia. Section VI draws some lessons from the Malaysian experience. II. The Impact of Capital Flows on the Malaysian Economy From 1992 to the period just before the East Asian crisis, Malaysia had enjoyed a large inflow of foreign capital, both long and short term. Long-term private capital (foreign direct investment) had always been the most reliable source of external financing for Malaysia since it started to open its doors to private capital flows. Table 1 shows that the long-term private capital flow had increased steadily over the years and the flow was especially strong in the 1990s. In 1990, about US$2.3 billion of the private long-term capital came into Malaysia and this had more than doubled in 1997 (US$5.1 billion). During the 1990-97 period, the cumulative FDI inflow was US$34.8 billion. A comparison of FDI flow in 1998 in U.S. dollar terms is problematic due to the large volatility of the exchange rate. However, in ringgit terms, the FDI flow in 1998 (RM 13.1 billion) was higher than that of 1997 (RM 11.5 billion) (Ministry of Finance, Malaysia 1999). TABLE 1 Net Balance of Payments of Malaysia (In US$ millions) Item 1990 1991 1992 Merchandise f.o.b. 2,627.04 526.91 3,376.08 Balance on services -3,601.11 -4,798.18 -5,712.94 Balance on goods and services -974.07 -4,271.27 -2,336.86 Unrequited transfers 54.44 37.09 132.16 Balance on current account -919.63 -4,234.18 -2,204.71 Official long-term capital -1,050.37 -241.82 -1,127.84 Federal Government -291.48 38.55 -1,243.14 Market loans 364.07 118.91 -1,121.18 Project loans 134.81 -20.00 -72.16 Suppliers' credit -62.22 -60.36 -49.80 Non-financial Public Enterprises -764.44 -269.09 152.55 Other assets and liabilities 5.56 11.27 -37.25 Private long-term capital 2,336.67 3,998.55 5,178.04 Balance on long-term capital 1,286.30 3,756.73 4,050.20 Basic balance 366.67 -477.45 1,845. …

The Right of Supervision-A Policy of Stimulus: [Interview with A.I. Stepanenko

The Right of Supervision-A Policy of Stimulus: [Interview with A.I. Stepanenko

Entrepreneurship and public policy: can government stimulate business startups?

Introduction Small Businesses and Smokestacks: Opportunities and Challenges for Development Policy The Business Startup: Issues in Designing Local Stimulus Policies Promoting Entrepreneurship Locally: There Is a Will But Is There a Way? Measuring the Effects of Policy on Small Business Startups Development Policy in Four New York State Counties The Performance of Entrepreneurial Promotion Policies Reconsidering Entrepreneurial Promotion Appendixes: Note on the Quasi-Experimental Research Design Development Organizations in Study Sites Questionnaire Used in the Study Cluster Map of Baseline Counties Industries Used in the Study References Index