Use Of Fiscal Instruments Research Articles

БИЗНЕС ЦИКЛЫ, АНТИКРИЗИСНАЯ ПОЛИТИКА И ИНФЛЯЦИЯ (СРАВНИТЕЛЬНЫЙ АНАЛИЗ)

The purpose of this article, within the framework of cyclical fluctuations in the global economic situation, is to consider the two largest crises of our time - the global crisis of 2007-2009 and the crisis of 2019- 2021. The comparative analysis of their depth and consequences was carried out Common features and their specifics were identified in various groups of countries based on the economic indicators of Russia, the USA and the European Union. Anti-crisis policy measures, the use of fiscal instruments and monetary regulation are considered, and their effectiveness is compared. An analysis of anti-crisis steps showed that, despite the commitment of the governments of some countries to the monetary model of regulation, the time has come when objective economic reasons force them to use the tools of the neo-Keynesian model. Signs of a change in political course towards strengthening state participation in the economy are considered to solve structural problems that are deepening crises, and to overcome the protracted stagnation.

The Dynamics of Regional Economic Growth and the Priorities of US Regional Economic Policy

Stimulation of the pace and formation of the structure of regional economic growth is invariably one of the fundamental goals of the regional economic policy pursued by the subjects of the federal state. In the context of the cyclical development of regional economic systems and the beginning of the regionalization of the economy of the world leader – the United States of America - the problem of spatial and temporal differentiation of the choice of priorities to stimulate regional economic growth is becoming more urgent. Using the methods of regression modeling and economic statistics, an analysis was made of the influence of the main instruments of regional economic policy on the dynamics of regional economic growth over a long period of time 1961–2020 and forecast up to 2030. The obtained results revealed spatial asymmetries in the combination of the use of fiscal instruments and structural investment measures to regulate economic growth, associated with the level of development of subregions and individual states of the country. The transfer of the investment burden to stimulate regional economic growth in times of crisis to the end consumer is noted. The article substantiates the increasing role of such an instrument of regional policy as the selective regulation of aggregate regional export in the long term, indicating the transition from globalization to regionalization of the development of the economic systems of the states and largest municipalities of the United States to maintain the pace of regional economic growth while changing its structure.

Debt and economic growth in Asian developing countries

External debt levels have increased dramatically over the past decades. Many Asian developing countries are trapped in unprecedented levels of indebtedness while utilizing a high level of external debt for fiscal activities. This study empirically investigates the impact of such debt levels by estimating the appropriate threshold of external debt to GDP on economic growth for a sample of 16 Asian countries during the years 1980 to 2016. The outcomes indicate that external debt negatively and significantly impacts growth in most of these countries. Debt to GDP threshold construction revealed ten countries with a threshold below 30%, three countries in the range between 30%–60%, two countries in the range between 60%–90%, with only Thailand exceeding a 90% threshold. The fiscal discipline of targeting an appropriate debt to GDP ratio can serve as a guide to optimizing sustainable economic growth for countries in the Asian region. That is, appropriate ratios would allow flexibility in the use of fiscal instruments to counter any future incoming economic shocks.

FISCAL INSTRUMENTS OF REGULATORY COMPETITION IN THE FACE OF CHALLENGES TO MACROECONOMIC STABILITY DURING A PANDEMIC COVID-19

The article’s relevance lies in need for empirical testing of theoretical concepts in the new economic conditions caused by the corona crisis. The purpose of the paper is to identify the manifestations of macroeconomic instability in the period before and after the pandemic and to demonstrate the effectiveness of the use of fiscal instruments of regulatory competition to achieve the goals of the stabilization policy of the governments of countries with developed economies. The research is based on the categories of theoretical and empirical levels of knowledge. The use of the method of analysis, abstraction and synthesis, induction and deduction, as well as the system-structural method, the method of idealization, made it possible to identify new forms of manifestation of the phenomenon of fiscal regulatory competition and establish its place in the implementation of the stabilization and incentive programs of the government. It was found that the stimulation of economic activity and the increase in net exports using the instruments of fiscal neo-protectionism occurs due to a simultaneous increase in employment and a decrease in the cost of domestically produced goods, accompanied by the rise in relative consumer prices for imported goods. Using economic analysis and mathematical modelling methods confirmed the hypothesis about the stimulating effect of fiscal policy. Based on the regression analysis of the mechanism of the fiscal channel of the stabilization policy of developed countries, which influenced the dynamics of the conjuncture in the period from 2018 to 2022, a conclusion was drawn regarding the strength of its impulse. It has been found that the fiscal channel less clearly transmits the impulse from the growth of expenditures (financed by loans) to the real sector. It is assumed that in the process of signal transmission, it scatters. It has been established that in the short term, in a recession, the fiscal impulse also does not cause a jump in inflation. In the context of inflationary growth in the United States, Japan, and Germany, there is a turn towards tightening monetary policy, which limits the use of financial instruments to counter the recession and therefore increases the demand for the benefit of fiscal tools to counter the recession

Fiscal Stabilization in the United States: Lessons for Monetary Unions

The debate about the use of fiscal instruments for macroeconomic stabilization has regained prominence in the aftermath of the Great Recession, and its relevance has suddenly increased further, after the recent Covid-19 shock. The analysis of fiscal stabilization in the United States, a monetary union equipped with a common fiscal capacity, has often informed the literature on the European EMU and could serve as a reference for its possible future reforms. This paper expands that literature in three ways: first, by measuring stabilization not only as inter-state risk-sharing of asymmetric shocks, but also as intertemporal stabilization of common shocks; second, by doing this for specific items in the US federal budget, both on the revenue and on the expenditure side; and third, by also measuring the impact of the federal system of unemployment benefits and of its extension as a response to the Great Recession. Corporate and personal income tax, on the revenue side, and social security benefits and federal grants, on the spending side, are the most effective items. The US federal system of unemployment insurance provides great stabilization in the event of a large shock, in particular when enhanced by the discretionary program of extended benefits. These findings imply that a proper design of the budget can maximize its stabilization effect, when it helps bridging the gap between higher mobility of capital and lower mobility of labor, by collecting revenues based on the income of the most mobile factor (corporate income tax) and providing support to the income of the least mobile factor (social security).

TOOLS OF BUDGET AND TAX REGULATION OF THE ECONOMY

Introduction. Today, budget and tax instruments play an important role in implementing the policy of state regulation of economic development. The implementation of effective economic policy involves the use of fiscal instruments that contribute to long-term financial and economic goals. Given this, the choice of fiscal instruments, the time of their implementation and their combination - these are important issues, so to address them it is necessary to conduct a balanced assessment of the financial and economic condition of the economy. Methods. In the process of writing the article used general scientific techniques and methods of economic research. The theoretical and methodological basis of intelligence is the analysis of scientific works of domestic and foreign scientists on the study of tools of budget and tax regulation of the economy, Internet resources. The article uses general and special research methods, in particular: general and special – to ensure the achievement of this goal; dialectical, abstract and logical – to substantiate theoretical positions and conclusions. Results. The article analyzes the theoretical aspects of the concept of «fiscal regulation». The decisive role of budgetary and tax instruments in the development of the state economy is stated. It is determined that in the vast majority of cases, fiscal instruments are considered by scholars as a general system of budgetary and fiscal instruments. It is proved that effective budget and tax regulation helps to ensure the way out of crisis processes of the state. The results of the study allow us to state the existence of a significant number of fiscal instruments. Discussion. Further research will focus on the study of budget and tax tools as the main element of the system of regulation of economic development of the state. Keywords: budget and tax regulation, budget instrument, tax instrument, economic development.

Information and Analytical Support of Fiscal Incentives to Increase the Competitiveness of the Tourist Complex

The article is devoted to the study of the peculiarities of the development of the tourism industry in Ukraine and to the characteristics of the problem of ensuring its competitiveness. The place of Ukrainian tourism in the world rankings is characterized. The components that hinder the growth of the competitiveness of the tourism industry of Ukraine are identified. The potential of the tourism industry and the need to apply fiscal incentives for its development are described. The existing inconsistency of the application of fiscal incentives with the level of social and economic development of the territory, including their tourist sector, are noted. The problems of the development of investment attractiveness of the tourist complex of Ukraine are characterized. The grouping into managerial, informational, infrastructural, political and legal, economic and social ones are carried out and it becomes the basis for determining the corresponding fiscal incentives to increase the competitiveness of the tourism industry. The reasoning of the use of levers of fiscal incentives in Ukraine for the creation of tourist routes that will combine priority tourist complexes are provided. The recommendations for the introduction of two tourist routes and the use of tools to stimulate their development by attracting investments are given. The features of the use of fiscal instruments to stimulate the competitiveness of the tourist complex are highlighted. The need to form a high-quality statistical base for assessing the competitiveness of the tourist complex that will provide a balanced application of budget incentives are emphasized. The attention is focused on a number of problems in maintaining the statistics of tourism in Ukraine that makes it impossible to analyze the quality of tourist flows. The recommendations to improve the situation are developed. The directions of state support for the competitiveness of the tourist complex are substantiated, and above all, the need to increase the level of development of the tourist infrastructure are pointed out. It is indicated that an effective incentive for the formation of competitive advantages of the tourist complex can be territories of priority development of the tourist type with the appropriate use of fiscal incentives and public-private partnerships.

Potential Impact of the Nonessential Energy-Dense Foods Tax on the Prevalence of Overweight and Obesity in Children: A Modeling Study.

Background: Consumption of foods high in energy, sugar, fat, and salt contributes to the increase in body mass index and the prevalence of overweight and obesity in children. Mexico implemented an 8% tax to non-essential energy-dense foods (NEDF) in 2014 as part of a national strategy to reduce obesity.Objective: We modeled the potential effect of the NEDF tax on body mass index and overweight and obesity in Mexican children (6–17 years).Materials and Methods: We used the Dynamic Childhood Growth and Obesity Model calibrated to Mexican children to simulate the potential 1-year effect of the NEDF tax on body weight. Inputs for the model included NEDF consumption, weight, and height, obtained from the 2012 Mexican National Health and Nutrition Survey. To project the potential impact of the tax, we ran a first simulation without intervention and another reducing the caloric intake from NEDF in the proportion observed in the Mexican population after the tax (−5.1%). The tax effect was defined as the absolute difference in body mass index and prevalence of overweight and obesity between both models.Results: The tax on NEDF should lead to a mean reduction of 4.1 g or 17.4 kcal/day of NEDF at the population level. One year after the tax, mean body weight and body mass index should decrease 0.40 kg and 0.19 kg/m2; this translates into −1.7 and −0.4% points in overweight and obesity, respectively.Conclusions: The use of fiscal instruments to discourage the consumption of NEDF could help to reduce the prevalence of overweight and obesity in children.

Развитие инструментов бюджетной политики для стимулирования экономического роста Российской Федерации

Currently, the Russian economy is facing a number of exogenous and endogenous challenges that hinder economic growth and development. The budget policy of the state can, through the use of fiscal instruments, support declining business activity, which, on the one hand, requires an increase in public spending, including investment, and, on the other hand, a reduction in the tax burden. The paper presents an analysis of the most successful examples of using fiscal tools in modern Russia.
 The purpose of the article is to analyze the domestic experience of using fiscal instruments and identify the most effective tools for stimulating economic growth.
 Statistical methods, a systematic approach, and integral analysis were used as the methodological basis of the study.
 Having studied the best practices of applying fiscal instruments in Russia, the authors identified the most effective tax and budget instruments. Conclusions are drawn about the greatest effectiveness of the application of proportional taxation of personal income and reduction of indirect tax rates. Among the budget instruments, spending on R & D financing, increasing budget investment in infrastructure projects, and human capital are of particular importance. Based on the results of the study, theoretical and practical proposals for adjusting the current budget policy of Russia are formulated.

FISCAL SPACE DIVERGENCE OF UKRAINE: DEBT FATIGUE RISKS

Restrictions on the use of fiscal instruments due to high level of public debt have affected the fiscal spaces of many countries. The issue of forming a sufficient fiscal space in Ukraine is extremely relevant in the context of global financial uncertainty, unavailability of new borrowings and acceleration of the COVID-19 pandemic.The study summarizes existing narratives and theoretical and methodological approaches to an important economic category of a fiscal space. The fiscal space is analyzed as the difference between the current level of country`s public debt and its debt limit.The aim of the study is focused on empirical assessing the fiscal space, studying the dynamics of Ukraine’s public debt, its ratio to GDP, and an empirical analysis of the relationship between growing public debt and economic growth, primary budget balance in Ukraine during 1995-2019, calculating the fiscal reaction function, as well as identifying possible risks of fiscal fatigue based on analysis fiscal response function.The authors confirmed a negative correlation between public debt and economic growth for Ukraine based on regression analysis of the data set in 1995—2019. It is revealed that the basic obstacle to the creation of sufficient fiscal space in Ukraine is unacceptably high rates of servicing sovereign debts against the background of insignificant or negative GDP growth rates.The debt fatigue risks were emphasised. Fiscal fatigue or depletion was assessed as a specific stage of insensitivity of public finances to the growth of public debt. It is proposed to restrain further unjustified increasing of public debt, to abandon the use of risky instruments to avoid fiscal fatigue. Fiscal rules aimed at fiscal sustainability and efforts to expanding the fiscal space can be considered as an acceptable fiscal policy.

Assessing Regional Inequality based on Revenues of the Federal Budget using the Pareto Principle

The use of fiscal instruments for regulating territorial development has both positive and negative macroeconomic effects related to the withdrawal of revenue from more economically developed regions. Therefore, using the Pareto principle, this paper assesses the negative effects of budgetary reallocation. This study considers inter-budgetary reallocation as an annually recurring four-stage process of regional budgets reproduction. The article analyses the firs t stag e o f th e process , namely , the creation of resource allocation base. A hypothesis has been tested to examine whether the centralisation of tax revenues in the federal budget and, consequently, an increase in inter-budgetary reallocation does not reduce, but exacerbates inequality in regions due to their revenue depletion and limited self-development. The study assessed the contribution of federal districts and individual constituent entities of the Russian Federation to the federal budget, withdrawal of regional revenues, and the concentration of territorial revenues to the federal budget. Based on the ranking of regional contributions to federal revenues, I built a Pareto diagram, checking the 80/20 rule for grouped and non-grouped data. Calculations and comparison of the data for 2017 and 2010 confirm numerous negative effects. For example, there is an increase in the withdrawal of regional revenues and a significant concentration of federal revenues for a limited number of regions. Additionally, negative effects include the existence of a direct relationship between regional revenues and the rate of their withdrawal, as well as the predominance of the equalising component over the stimulating one in regional socio-economic development. These effects lead to revenue depletion in the territories and increased centralisation of budgetary resources, contradicting the principles of fiscal federalism. Authorities can use the research results, conclusions and suggestions for managerial decision-making to improve intergovernmental relations in the Russian Federation.

The Grand Tour: Keynes and Goodwin go to Greece

The impact of the crisis in the Greek economy was not uniform among the regions, threatening socioeconomic cohesion. In this paper, we explore the concept of the income multiplier in a multi-regional input–output setting, in the context of the Greek recession, showing empirical evidence for the increasing magnitude of the multiplier during the recession period. The main results reveal a complex system of interregional relations on some of whose structural characteristics the cyclical reaction paths of the regions depends. In this case, the use of fiscal instruments to stimulate local activity in the regions may bring about important implications for regional inequality in Greece.

FISCAL REGULATION OF THE UKRAINIAN CONSUMER MARKET

Introduction. In modern conditions it is important to ensure the competitiveness of one's own country by facilitating the development of high-tech, quality national production, with further stimulation of its exports and protection against fraudulent imports. The research of the state and trends of the consumer market is relevant and necessary for determining the directions and levers of the state's influence on its development. Purpose. The objective of this paper is to research the trends of the Ukrainian consumer market, substantiates possible ways of regulating it with the help of fiscal tools from the point of view of modern protectionism and taking into account globalization and integration requirements. Results. The dynamics and structure of consumer expenditures of households as the main end consumers, the share of imports in the consumer market of Ukraine, foreign trade trends are considered. The import dependence of the consumer market and disturbing tendencies for its strengthening have been revealed. The necessity to support and facilitate the development of national production and deterrence of imports has been identified. Conclusions. The expediency of the implementation of the import substitution policy, the use of fiscal instruments for the development of competitive production with the emphasis on the innovative component is substantiated. Anti-dumping, countervailing and special trade defence measures need to be improved and activated to counteract unfair imports.

Carbon Fiscal Instruments and Green Finance: An Aid to the Success of SDGs in Nigeria?

The need to improve on the use of Fiscal Instruments and engender an improvement in Green Finance remains a challenge in Nigeria. Using the Metcalf’s Framework, this paper explains why Carbon Fiscal Instruments are enforced on emitters to check emissions and their level of effectiveness. Furthermore, a comparative analysis of Nigeria’s performance with some sub-Saharan African countries using the SDGs Index and Dashboard Indicators Framework was discussed. Finally, after appraising the use of Green Finance as a means of innovative finance, the paper found a dearth of fiscal instruments in Nigeria coupled with a low level of Green Finance opportunities. The paper concludes that Nigeria needs to design and implement an optimal climate change fiscal policy and Green Finance mix for Green growth. We recommend that the government needs to encourage creative and innovative ways of generating funds for Green investments in the private sector.

Fiscal Stabilization in the United States: Lessons for Monetary Unions

The debate about the use of fiscal instruments for macroeconomic stabilization has regained prominence in the aftermath of the Great Recession, and the experience of a monetary union equipped with fiscal shock absorbers, such as the United States, has often been a reference. This paper enhances our knowledge about the degree of macroeconomic stabilization achieved in the United States through the federal budget, providing a detailed breakdown of the different channels. In particular, we investigate the relative importance and stabilization impact of the federal system of unemployment benefits and of its extension as a response to the Great Recession. The analysis shows that in the United States, corporate income taxes collected at the federal level are the single most efficient instrument for providing stabilization, given that even with a smaller size than other instruments they can provide important effects, mainly against common shocks. On the other hand, Social Security benefits and personal income taxes have a greater role in stabilizing asymmetric shocks. A federal system of unemployment insurance, then, can play an important stabilization role, in particular when enhanced by a discretionary program of extended benefits in the event of a large shock, like the Great Recession.

A. Hrechko. Influence of physical stimulations on sustainable development of regions.

As a result of the study, it was found that fiscal policy is a complex system of interconnections between the state and other subjects of market relations, which is a constant search for a balance of interests. The economically weighted use of fiscal instruments allows us to minimize the use of direct regulatory methods by the government. It is revealed that modern fiscal policy is aimed at fiscal decentralization, focused on the formation of a favorable institutional environment for the functioning of economic entities of the regions and based on a system of economic incentives and motives. It is determined that fiscal stimulation includes a wide range of means, the application of which is determined, first of all, by the object of stimulation, the legal form of organization and legal status of the taxpayer, the type of activity, the regional feature and social value. It is substantiated that one of the basic directions in which fiscal stimulus effectively implemented approaches are innovative policy, aimed at forming and achieving prerequisites for sustainable development of regions. The directions of innovation activity fiscal stimulation in the regions are proposed. It is revealed that in the conditions of globalization of economic ties, there is a concentrated localization of innovation and production potential within the framework of regional business clusters. It is proved that the introduction of fiscal stimulus requires a thorough cost analysis to be applied at the expense of determining: the alternative value of fiscal incentives; the size of unsatisfactory budget resources as a result of the introduction of incentive measures; the cost of administering fiscal incentives, etc.

State-of-the-art for food taxes to promote public health.

The use of taxes to promote healthy nutritional behaviour has gained ground in the past decade. The present paper reviews existing applications of fiscal instruments in nutrition policy and derives some perspectives and recommendations from the experiences gained with these instruments. Many countries in different parts of the world have experiences with the taxation of sugar-sweetened beverages, in some cases in combination with taxes on unhealthy food commodities such as confectionery or high-fat foods. These tax schemes have many similarities, but also differ in their definitions of tax objects and in the applied tax rates. Denmark has been the only country in the world to operate a tax on saturated fat content in foods, from 2011 to 2012. Most of the existing food tax schemes have been introduced from fiscal motivations, with health promotion as a secondary objective, but a few have been introduced with health promotion as the primary objective. The diversity in experiences from existing tax schemes can provide valuable insights for future use of fiscal instruments to promote healthy nutrition, in terms of designing effective and efficient tax or subsidy instruments, and in terms of smooth and politically viable implementation of the instruments.

Budgetary rigour with stimulus in lean times: Policy advices from an agent-based model

The 2008 financial crisis, and the subsequent global recession, triggered a wide-spread economic and political debate on the proper policy combination to deal with the crisis and to prevent similar ones in the future. Probably, the main dispute has been around the use of fiscal instruments in order to foster growth while keeping public debt under control. The European Union, for instance, endorsed “austerity” measures for fiscal consolidation but has been sharply criticized by several scholars. This paper aims at contributing to the current debate by presenting the outcomes of a computational study performed with the Eurace agent-based model. We set up an experiment with two base policy scenarios, i.e., stability and growth pact and fiscal compact, incrementally enriching them with complementary policies which relax fiscal rigidity and introduce quantitative easing. Results show that budgetary rigour performs well if and only if some mechanisms of fiscal relaxation and monetary accommodation are considered during bad times; thus confirming in a richer and more realistic model setting the fundamental tenet of Keynesian economics about the importance of sustaining aggregate demand during recessions.

Do political budget cycles work? A micro-level investigation of pre-electoral budgeting and its electoral consequences

One of the most puzzling empirical patterns in political economy is the disconnect between the regular use of fiscal instruments for re-election purposes by incumbents (otherwise known as political budget cycles) on the one hand and their relative electoral ineffectiveness on the other. This article engages with this puzzle by shifting the analysis from the macro to the micro-level. It shows that when taking into account individual-level heterogeneity in the electoral response, one can gain a more nuanced understanding of the political consequences of pre-electoral budgeting. By relying on a set of multi-level random-effects regressions using data from the Comparative Study of Electoral System surveys, it points to two such sources of heterogeneity: social status and ideology. In particular, higher status individuals are considerably less responsive to pre-electoral deficits, though the effects depend on the composition of fiscal measures. Results for ideology are somewhat less consistent across different operationalizations of ideology as well as model specification.

Налоговая политика России в условиях кризиса

The use of fiscal instruments in the process of anti-crisis regulation means a choice between increasing the level of taxation to ensure budget revenues and its decrease to support the economic activity of businesses. Using the implicit tax rates (ITR) it is shown that since 2009 the levels of taxation of income from capital and consumption were steadily declined as a result of tax measures. The level of small business taxation shrank only because of the inflationary decrease the value of the tax payments. The tax maneuver measures under the falling oil prices led to some growth of the profit tax receipts that does not compensate the total losses of the budget system.