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Tuesday, July 14, 2020 | History

2 edition of Are all summary indicators of the stance of fiscal policy misleading? found in the catalog.

Are all summary indicators of the stance of fiscal policy misleading?

International Monetary Fund.

Are all summary indicators of the stance of fiscal policy misleading?

by International Monetary Fund.

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  • 9 Currently reading

Published by International Monetary Fund in Washington, D.C .
Written in English


Edition Notes

Statementprepared by G. A. Mackenzie.
SeriesIMF working paper -- WP/88/112
ContributionsMackenzie, G. A., International Monetary Fund. Fiscal Affairs Dept.
The Physical Object
Pagination30 p. --
Number of Pages30
ID Numbers
Open LibraryOL18807575M

  Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy .   Are All Summary Indicators of the Stance of Fiscal Policy Misleading? By George A. (sandy) Mackenzie.

According to Tobin, the two standard instruments of short-run demand management—such as fiscal policy and monetary policy—cannot achieve the two usual targets, namely, full employment and price stability. Publisher Summary. in part because of their reliance on a variety of misleading indicators of the stance of monetary policy. what fiscal stance should be. One dilemma for Budget is how large the fiscal surpluses should be, whether they should be increased further by contractionary policy or reduced by * Duffy, Kearney, McCoy and Smyth are at The Economic and Social Research Institute, McMahon is .

As such, a better growth outlook of percent is anticipated for this year following a percent estimated growth in This is led by improved performances expected across all major sectors of the economy, supported by favourable domestic sentiments and accommodative fiscal and monetary policy . Colombia has a track record of prudent macroeconomic and fiscal management, and despite economic downturns has maintained its investment grade rating since After slowing down to percent in , economic growth accelerated to percent in , driven by robust private consumption and stronger investment.


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Are all summary indicators of the stance of fiscal policy misleading? by International Monetary Fund. Download PDF EPUB FB2

T hat the unadjusted balance of the public sector’s financial operations is an unreliable indicator of the stance of fiscal policy has long been recognized by economists. 1 Its unreliability stems from its endogeneity with respect to the level of economic activity—that is, the sensitivity of most revenue and some expenditure components to the business cycle.

The indicator of the stance of fiscal policy (IFPS) would then be IFPS = H. (FP2- FP1), (3) where FP2 and FPi are the new set and the base case set of fiscal policy variables, respectively. In other words, the fiscal policy stance is the product of a series of multipliers and changes in fiscal policy instruments.

The paper concludes that the defects of summary fiscal indicators have been exaggerated. It is not feasible to include all changes in public sector net worth in the deficit, and the existence of liquidity constraints and aversion to indebtedness imply that conventionally measured public sector deficits are.

The paper concludes that the defects of summary fiscal indicators have been exaggerated. It is not feasible to include all changes in public sector net worth in the deficit, and the existence of liquidity constraints and aversion to indebtedness imply that conventionally measured public sector deficits are Author: G.

Mackenzie. Are All Summary Indicators of the Stance of Fiscal Policy Misleading. Budget Deficits and Budget Institutions. A commonly used indicator to assess the stance of fiscal policy is the overall balance, which measures the difference between revenues and grants, and expenditure and net lending.

6 This balance may be in surplus or deficit. As a starting point for analysis, an overall deficit (surplus) would suggest an expansionary (contractionary) fiscal. Measuring the Fiscal Deficit: Overview of the Issues""; ""Part II. The Adequacy of Summary Measures of the Fiscal Deficit""; ""2.

Fiscal Deficit Measurement; Basic Issues""; ""3. Are All Summary Indicators of the Stance of Fiscal Policy Misleading?""; ""4. Measurement of Fiscal Performance in IMF-Supported Programs: Some Methodological Issues. Mackenzie GA () Are all summary indicators of the stance of fiscal policy misleading.

Staff Papers, IMF 36(4) Milesi-Ferretti GM () Good, bad or ugly, on the effects of fiscal rules with creative accounting. Changes in taxation and in government spending are called fiscal policy. The government actively uses fiscal policy to steer the American economy.

In this SparkNote, you will learn both how and why the government utilizes fiscal policy. But fiscal policy is not the only means that the government possesses to steer the economy.

Structural indicators of a country`s fiscal position are regularly used as estimates of both discretionary changes in fiscal policy and the effect of fiscal policy on aggregate demand. Mackenzie, G.A. () ‘Are All Summary Indicators of the Stance of Fiscal Policy Misleading?’ IMF Working Paper WP/88/ Washington: IMF.

Matthews, R.C.O. () ‘Why Has Britain Had Full Employment since the War?’, The Economic Journal, CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): In this paper we argue that any assessment on the intentional stance of fiscal policy should be based upon all the information available to policymakers at the time of fiscal planning.

In particular, real-time data on the discretionary fiscal policy “instrument”, the structural primary balance, should be used in. Braconier, Henrik & Holden, Steinar, "The Public Budget Balance - Fiscal Indicators and Cyclical Sensitivity in the Nordic Countries," Working Pap National Institute of Economic Research.

Mackenzie, "Are All Summary Indicators of the Stance of Fiscal Policy Misleading. A 'read' is counted each time someone views a publication summary (such as the title, abstract, and list of authors), clicks on a figure, or views or downloads the full-text. In economics and political science, fiscal policy is the use of government revenue collection (taxes or tax cuts) and expenditure (spending) to influence a country's economy.

The use of government revenues and expenditures to influence macroeconomic variables developed as a result of the Great Depression, when the previous laissez-faire approach to economic management became unpopular.  Benjamin Ford1 The economic cycle affects a government’s fiscal position.

Several techniques have been developed to estimate the variation of budget aggregates arising from the economic cycle. These techniques are known as structural fiscal indicators and estimates are published semi-annually by both the IMF and the OECD, among others.

Fiscal policy is a policy adopted by the government of a country required in order to control the finances and revenue of that country which includes various taxes on goods, services and person i.e., revenue collection, which eventually affects spending levels and hence for this fiscal policy is termed as sister policy of monetary policy.

In this lesson summary review and remind yourself of the key terms, calculations, and graphs related to fiscal policy. Topics include how taxes and spending can be used to close an output gap, how to model the effect of a change in taxes or spending using the AD-AS model, and how to calculate the amount of spending or tax change needed to close an output gap.

This is consistent with the fiscal policy stance aimed at lowering the debt burden and creating space for private sector-led growth; Jamaica recorded a Current Account deficit for the April-September period of FY /19 of US$mn, an improvement of US$mn.

The fiscal policy of a government has a direct influence on that country's economy. The government is involved in fiscal policy any time that it makes payments, purchases goods and services, or even collects taxes.

Any change in the government's fiscal policy affects the economy as well as individuals. If there is a tax increase, people have. Pension Reform and the Fiscal Policy Stance. IMF Working Paper No.

01/ Number of pages: 16 Posted: fiscal balance. 7. Are All Summary Indicators of the Stance of Fiscal Policy Misleading?

IMF Working Paper No. 88/ Number of pages: 36 Posted: 15 Feb Are All Summary Indicators of the Stance of Fiscal Policy Misleading? G.A. MACKENZIE * The Stabilizing Role of the Compensatory Financing Facility: Empirical Evidence and Welfare Implications MANMOHAN S.

KUMAR Evolution of Exchange Rate Regimes ROBERT P. FLOOD, JAGDEEP S. BHANDARI, and JOCELYN P. HORNE The External Debt Problem.measuring the degree of policy cyclicality from two separate fiscal and monetary policy reaction functions (from a Taylor rule), the authors show that in a majority of EMEs both fiscal and monetary policies were used to smooth output volatility during