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Business and Economics > Budgeting

You are looking at 1 - 7 of 7 items for :

  • Type: Journal Issue x
  • Commodity Markets x
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Cover IMF Working Papers
Austerity and Elections
Mr. Alberto Alesina
,
Gabriele Ciminelli
,
Davide Furceri
, and
Giorgio Saponaro
Conventional wisdom holds that voters punish governments that implement fiscal austerity. Yet, most empirical studies, which rely on ex-post yearly austerity measures, do not find supportive evidence. This paper revisits the issue using action-based, real-time, ex-ante measures of fiscal austerity as well as a new database of changes in vote shares of incumbent parties. The analysis emphasizes the importance of the ‘how’—whether austerity is done via tax hikes or expenditure cuts—and the ‘who’—whether it is carried out by left- vs. right-leaning governments. Our main finding is that tax-based austerity carries large electoral costs, while the effect of expenditure-based consolidations depends on the political-leaning of the government. An austerity package worth 1% of GDP, carried out mostly through tax hikes, reduces the vote share of the leader’s party by about 7%. In contrast, expenditure-based austerity is detrimental for left- but beneficial for right-leaning governments. We also find that the electoral cost of austerity—especially tax hikes—can be contained if it is implemented during good economic times.
Keywords:
austerity package; expenditure cut; yearly austerity; construction of Austerity variable; economy to Austerity; Tax expenditures; Government debt management
Cover IMF Staff Country Reports
Trinidad and Tobago: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper focuses on the impact of adjusting to commodity shocks in Trinidad and Tobago. With commodity resources being nonrenewable, developing a long-term strategy can help avoid unsustainable policies and ensure greater intergenerational equity. Recent country experiences highlight the benefits of precautionary buffers in smoothing fiscal adjustment process. Prudent and countercyclical fiscal policy implementation, structural reforms, and economic diversification can help contain the impact of commodity price booms and busts. Strong fiscal institutions are needed to help achieve and sustain the fiscal adjustment. Different adjustment strategies may be feasible depending on the needed size of the adjustment and country-specific circumstances. Trinidad and Tobago have faced several years of weak or negative growth on the back of terms-of-trade and energy supply shocks. A well-designed fiscal framework that considers potential uncertainties associated with commodity cycles can help improve fiscal management. Countercyclical policy implementation would help smooth the impact of commodity-induced sharp fluctuations in the economy.
Keywords:
ISCR; CR; fund; crime-control program; commodity; crime reduction; property crime; crime management system; crime in Trinidad and Tobago; Commodity prices; Fiscal consolidation; Caribbean; Global
Cover Fiscal Monitor, October 2015
Fiscal Monitor, October 2015
The Commodities Roller Coaster - A Fiscal Framework for Uncertain Times
International Monetary Fund. Fiscal Affairs Dept.

Abstract

This issue of the Fiscal Monitor examines the conduct of fiscal policy under the uncertainty caused by dependence on natural resource revenues. It draws on extensive past research on the behavior of commodity prices and their implications for macroeconomic outcomes, as well as on extensive IMF technical assistance to resource-rich economies seeking to improve their management of natural resource wealth.

Keywords:
FM; def; country abbreviation; statistics manual; commodity exporter; commodity price; resource revenue windfall; Fiscal stance; Macroeconomic and fiscal forecasts; Commodity prices; Global; Middle East; North Africa; Asia and Pacific; Africa; commodity revenue; oil price shock; commodity cycle; commodity dependence; price dynamics; commodity price swing; commodity price upturn; price-smoothing rule; price windfall; commodity price cycle; unexpected commodity price swing; Natural resources; Commodity price fluctuations
Cover IMF Working Papers
Global and Regional Spillovers to Pacific Island Countries
Mr. Yiqun Wu
,
Ms. Patrizia Tumbarello
, and
Niamh Sheridan
Regional integration of Pacific Island countries (PICs) with Australia, New Zealand, and emerging Asia has increased over the last two decades. PICs have become more exposed to the region’s business cycles, and spillovers from regional economies are more important for PICs than from advanced economies outside the region. While strong linkages with Asia would help in the event of a global downturn, PICs remain particularly vulnerable to global commodity price shocks. In this paper, we use a Vector Error Correction Model (VECM) for each PIC to gauge the impact of global and regional growth spillovers. The analysis reveals that the impact on PICs’ growth from an adverse oil shock would be substantial, and in some cases even larger than from a negative global demand shock. We also assess the spillovers to the financial sector from the deterioration of the global outlook. PICs should continue to rebuild policy buffers and implement growth-oriented structural reforms to ensure sustained and inclusive growth.
Keywords:
WP; Pacific island country; IMF staff calculation; commodity; commodity importer; Pacific islands; spillover; downside scenarios; commodity prices; commodity exporter; commodity price; business cycle; PIC importer; Extra-budgetary funds; Spillovers; Remittances; Commercial banks; Global; Australia and New Zealand
Cover IMF Staff Country Reports
Indonesia: 2008 Article IV Consultation-Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Indonesia
International Monetary Fund
Indonesia’ 2008 Article IV Consultation reports that Indonesia’s growth performance remains strong despite the deteriorating global environment. The economy remains vulnerable to shifts in investor sentiment, and volatility in the government bond market has increased. The new policy of increased reselling of official foreign exchange receipts from oil exports should support the rupiah and help dampen inflation, but a more automatic mechanism for recycling official reserves would, in addition, enhance liquidity and foreign exchange market development.
Keywords:
ISCR; CR; budget proposal; Ten-year government bond bond yield; draft budget; bond yield; market expectation; budget outlook; Inflation; Fuel prices; Commodity prices; Energy subsidies; Oil prices; Global; Asia and Pacific
Cover IMF Staff Country Reports
Australia: Staff Report for the 2006 Article IV Consultation
International Monetary Fund
Economic growth is strengthening, stimulated by the high terms of trade. Monetary policy has been tightened appropriately. A flexible monetary policy response to potential external shocks, including commodity price swings, will help to cushion growth while preserving low inflation. To promote robust risk management practices by financial institutions, the government intends to conduct further stress tests and review the regulation of banks’ liquidity. The recent surge in revenues provides resources that should be used for the implementation of reforms in sustaining strong economic growth.
Keywords:
ISCR; CR; core CPI; core CPI inflation; export commodity price; Australia; debt; price; headline CPI inflation; commodity price; private sector; medium-term growth; Commodity prices; Inflation; Budget planning and preparation; Income; Global
Cover Macroeconomic Policies in an Interdependent World
Macroeconomic Policies in an Interdependent World

Abstract

Copublished with the Brookings Institution, Washington D.C. and the Centre for Economic Policy Research, London, and edited by Ralph Bryant, David Currie, Jacob A. Frenkel, Paul Masson, and Richard Portes, this volume considers economic interdependence among well developed countries as well as between them and the developing regions of the world.

Keywords:
BOOK; exchange rate; country; professor of Economics; H. Abbott professor; professor of international economics; policy rule; price level; Exchange rates; Real exchange rates; Trade balance; Government debt management; Budget planning and preparation; Global; Europe; Southern Europe; East Asia; exchange rate targeting; deutsche mark; real GNP; Exchange rate arrangements