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Business and Economics > Budgeting

You are looking at 1 - 10 of 15 items for :

  • Type: Journal Issue x
  • Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy x
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Cover IMF Working Papers
Policy Multipliers in Japan Under QQE
Sam Ouliaris
and
Celine Rochon
This paper tests whether Japan's key macro policy multipliers have declined since 2013, the year that Japan introduced Qualitative and Quantitative Easing. We use the augmented Blanchard-Perotti structural VAR model introduced in Ouliaris and Rochon (2021) to study the dynamic effects of shocks in the central bank’s asset holdings, interest rates, and debt levels relative to GDP on economic activity in Japan. We find that both the expenditure and tax multipliers of Japan have fallen, implying that the effectiveness of fiscal policy in Japan declined following the change in monetary policy. Moreover, we find that the efficacy of quantitative easing is small, implying the need for huge interventions to have a significant effect on real GDP, and that the effectiveness of quantitative easing has declined since 2013. We argue that the reduction in policy multipliers can be attributed to the upward trend in the government debt level relative to GDP which, despite historically low interest rates, has increased Japan’s structural deficit, and the likelihood of reduced expenditures and higher taxes going forward.
Keywords:
fiscal multipliers; structural VAR; policy multiplier; debt multiplier; tax multiplier; effectiveness of quantitative easing; QQE multiplier; Tax expenditures; Real interest rates; Central bank balance sheet
Cover IMF Working Papers
Can Statistical Capacity Building Help Reduce Procyclical Fiscal Policy in Developing Countries?
Mr. Sampawende J Tapsoba
,
Mr. Robert C York
, and
Neree C.G.M. Noumon
Few papers have attempted to assess the role of “capacity,” especially in the area of macroeconomic statistics. Consequently, we make an attempt to advance this literature through the construction of a “statistical capacity building index,” and then test its explanatory power on the cyclicality of government spending. Using panel data from 62 developing countries, we find evidence that improvements in this index are associated with less procyclicality of government spending over the period 1990–2012; with the significance of this relationship dependent upon the quality of administrative and technical capacity of budgetary institutions.
Keywords:
WP; SCB index; government spending; dependent variable; index SCB; standard deviation
Cover The Role of the IMF as Trusted Advisor
The Role of the IMF as Trusted Advisor
The Role of the IMF as Trusted Advisor

Abstract

The IMF carries out its mandate to foster macroeconomic stability and thereby facilitate prosperity by promoting the adoption of sound policies and international cooperation. Ultimately, the means to achieve these goals is to have Fund policy advice translated into concrete action. Key to achieving such traction is the relationship between Fund staff and member country authorities, together with the quality of the advice and members’ confidence in it. That is, the Fund needs to be seen as a trusted advisor. This evaluation examines in what circumstances the Fund is viewed as a trusted advisor to its member countries. It uses evidence gathered since 2005, but emphasizes the period since the onset of the global crisis in 2007–08. Because the concept of trusted advisor is “in the eyes of the beholder,” the evaluation derives the main attributes from country authorities themselves.

Keywords:
IEOR; IEO; country; country authorities; IEO team; country income group; program status; trusted advisor; Emerging and frontier financial markets; Macroprudential policy; Financial Sector Assessment Program; Spillovers; Personal income; Global; Asia and Pacific; policy advice; Fund's surveillance mandate; Fund closer; IMF mission chief; Fiscal stimulus; Financial sector stability; Fiscal stabilization
Cover IMF Working Papers
The Impact of the Global Crisison South-Eastern Europe
Francesco Spadafora
,
Mr. Emidio Cocozza
, and
Mr. Andrea Colabella
This paper analyzes the impact of the global crisis on six South-Eastern European countries. The main objective is to compare macro-financial conditions and policies in the run-up to the crisis as well as to compare the policy responses to it, so as to highlight, inter alia, possible country-specific constraints. While sharing a common pre-crisis pattern of strong capital inflows and robust growth, a key difference in the conduct of macroeconomicpolicies is that some countries adopted expansionary (and procyclical) fiscal policies. These moves exacerbated external vulnerabilities and compromised the ability to discretionarily use the fiscal instrument in acountercyclical fashion.
Keywords:
WP; current account; budget deficit; foreign currency; financial support; core inflation; international capital flows; current account adjustment; IMF financial support; FYR Macedonia; transmission mechanism; short-term debt; Current account deficits; Budget planning and preparation; Government debt management; Global; Western Europe
Cover IMF Working Papers
Lessons From High Inflation Epidsodes for Stabilizing the Economy in Zimbabwe
Mr. Jens R Clausen
,
Ms. Sharmini Coorey
,
Bakar Ould-Abdallah
,
Ms. Sònia Muñoz
, and
Mr. Norbert Funke
Zimbabwe has currently the highest rate of inflation in the world (an annual rate of 1,730 percent in February, 2007). The high rates of inflation have contributed to the contraction of the economy, which has declined by about 30 percent since 1999. This paper examines the stabilization experience of countries that experienced similar rates of inflation (above 1,000 percent) during 1980-2005 and draws lessons for Zimbabwe. First, with appropriate stabilization policies, the fall in inflation can be very rapid and output normally recovers within the first year or two of stabilization. Second, while reforms need to be comprehensive, a strong upfront fiscal consolidation, including elimination of quasi-fiscal activities, is a critical element of a successful stabilization program. Third, although stabilization itself can be done without significant external financing in the first year, most countries benefited from external policy advice and technical support, including from the IMF, during stabilization and from an increase in financial assistance in subsequent years.
Keywords:
WP; inflation rate; public enterprise; Zimbabwe; price; deficit; exchange rate; High Inflation; Macroeconomic Stabilization; International Experience; price liberalization; financing requirement; price distortion; public enterprise reform; financial support; price deregulation; inflation expectation; Inflation; Public enterprises; Fiscal consolidation; Fiscal stance; Budget planning and preparation; Eastern Europe
Cover IMF Working Papers
How Should Subnational Government Borrowing Be Regulated? Some Cross-Country Empirical Evidence
Mr. Alexander Plekhanov
and
Mr. Raju J Singh
Countries have adopted various institutional responses to subnational government borrowing. Using a sample of 44 countries 1982-2000, this paper provides a panel data analysis to determine the most effective borrowing constraints for containing local fiscal deficits. The results suggest that no single institutional arrangement is superior under all circumstances. The appropriateness of specific arrangements depends upon other institutional characteristics, particularly the degree of vertical fiscal imbalance, the existence of any bailout precedent, and the quality of fiscal reporting.
Keywords:
WP; government
Cover IMF Working Papers
IMF and the Baltics: A Decade of Cooperation
Mr. Adalbert Knöbl
and
Mr. Richard D Haas
The paper is an economic history of the IMF’s involvement in the Baltic states. It describes and analyzes the initial economic stabilization; the period of consolidation and recovery; the effects of the Russian crisis of 1998; and the current growth phases of Lithuania, Latvia, and Estonia. There is also an assessment of cooperation with the Fund based on interviews with a number of ex-officials. The major conclusion is that the Baltics have been so successful because of their early commitment to change the stabilization and reform policies needed for successful transition, and their ownership of their IMF-supported programs.
Keywords:
WP; Fund staff; country authorities; Baltic country; monetary policy; policy advice; currency reform; currency board; transition to market economy; Lithuanian authorities; authorities of the logic; Estonian authority; Latvian authorities; government intervention; Budget planning and preparation; Currency boards; Structural reforms; Currencies; Baltics
Cover IMF Staff Country Reports
Spain: Selected Issues
International Monetary Fund
This Selected Issues paper analyzes the conduct of fiscal policy in Spain, made topical by the entry into effect of the Budgetary Stability Law in 2003. This law, along with the new permanent financing arrangements with the subnational levels of government, provides a new institutional and legal framework for fiscal policy. These innovations aim to lock in the gains in fiscal consolidation represented by the achievement of the goals of the Stability and Growth Pact in 2001.
Keywords:
ISCR; CR; absolute value; expenditure elasticity; product market; fiscal policy effect; government expenditure; consumption behavior; expenditure stabilizer; OECD estimate; expenditure decision; gross domestic product; employment protection index; C. fiscal policy; output volatility; Automatic stabilizers; Output gap; Tax expenditures
Cover IMF Working Papers
The Significance of Federal Taxes as Automatic Stabilizers
Gabriel Di Bella
In this paper, a simple methodology to assess the effectiveness of automatic stabilizers is proposed and empirically tested using French data for the period 1970-2000. The paper concludes that fiscal stabilizers have dampened output variability by approximately 35 45 percent depending on the measure of potential output used. In addition, the results indicate that fiscal stabilizers mainly operated through the reduction of private investment fluctuations from 1970 to 1985, and through the reduction of private consumption variability thereafter. Due to the counterfactual nature of the analysis performed, the simplicity of the theoretical model, and simultaneity issues that might introduce biases, the results can at most be interpreted as approximations of the phenomenon that is analyzed.
Keywords:
WP; mover accent; Automatic stabilizers; fiscal policy; France; GDP fluctuation; automatic stabilizers work; consumption model; potential GDP; effect of automatic stabilizers; consumption expenditure; Private consumption; General government spending; Disposable income; Private investment; Europe
Cover IMF Staff Country Reports
Sweden: Selected Issues
International Monetary Fund
This Selected Issues paper on Sweden analyzes possible adjustments to the fiscal framework that the authorities may wish to consider. The paper starts with a brief description of Sweden’s fiscal framework, followed by an assessment of the framework’s strengths and weaknesses. The scope for stabilization policy in Sweden is analyzed. The paper describes the Johansson commission’s recommendations and puts forth alternative options. A strategy that would entail marginal adjustments to the framework is also proposed.
Keywords:
ISCR; CR; sick leave; sickness benefit; disability retirement; sickness; sick leave compensation; expenditure ceiling; sickness compensation system; surplus target; sickness absence behavior; Automatic stabilizers; Output gap; Budget planning and preparation; Global