Ppt on current monetary and fiscal policy

The Natural Resource Curse and How to Avoid It MPA/ID extra lecture, Dec. 3, 2012 Jeffrey Frankel Part I: Channels of the commodity curse Part II: Policies.

commodity price volatility, crowding out of manufacturing, autocratic institutions, anarchic institutions, and procyclical macroeconomic policy, including capital flows, monetary policy and fiscal policy. But the important question is how to avoid the pitfalls, to achieve /shocks by tightening/appreciating, as the following correlations suggests…. Table 1: LACA Countries ’ Current Regimes and Monthly Correlations of Exchange Rate Changes ($/local currency) with Dollar Import Price Changes Import price/


Copyright © 2012 Pearson Addison-Wesley. All rights reserved. Chapter 17 Output and the Exchange Rate in the Short Run.

the short run A short-run model of output markets A short-run model of asset markets A short-run model for both output markets and asset markets Effects of temporary and permanent changes in monetary and fiscal policies Adjustment of the current account over time IS-LM model Copyright © 2012 Pearson Addison-Wesley. All rights reserved. 17-3 Introduction Long-run models are useful when all/


The Health of the Economy What is wrong and what can be done?

= ______+______+______+_____= GDP 3.Aggregate Market A B C D E F 4.List and explain 2 ideas of classical economist List and explain 2 ideas of Keynesian economist 5.Draw the AS for classical economist, Keynesian economist, current model 6.Fiscal policy and monetary policy for a recession and inflationary period 1. GDP potential A B Time ClassicalKeynesian Increase Government Spending to increase AD Saving= investment/


Coping with Commodity Volatility: Macroeconomic Policies for Developing Countries May 24, 2013 Jeffrey Frankel Harpel Professor of Capital Formation &

commodity price volatility, crowding out of manufacturing, autocratic institutions, anarchic institutions, and procyclical macroeconomic policy, including capital flows, monetary policy and fiscal policy. But the important question is how to avoid the pitfalls, to / > correlation shown by non-IT Latin American oil-importing countries. 76 Table 1: LACA Countries ’ Current Regimes and Monthly Correlations of Exchange Rate Changes ($/local currency) with Dollar Import Price Changes Import price changes are /


The Health of the Economy What is wrong and what can be done?

= ______+______+______+_____= GDP 3.Aggregate Market A B C D E F 4.List and explain 2 ideas of classical economist List and explain 2 ideas of Keynesian economist 5.Draw the AS for classical economist, Keynesian economist, current model 6.Fiscal policy and monetary policy for a recession and inflationary period 1. GDP potential A B Time ClassicalKeynesian Increase Government Spending to increase AD Saving= investment/


The Health of the Economy What is wrong and what can be done?

= ______+______+______+_____= GDP 3.Aggregate Market A B C D E F 4.List and explain 2 ideas of classical economist List and explain 2 ideas of Keynesian economist 5.Draw the AS for classical economist, Keynesian economist, current model 6.Fiscal policy and monetary policy for a recession and inflationary period 1. GDP potential A B Time ClassicalKeynesian Increase Government Spending to increase AD Saving= investment/


COMESA Experiences in Macroeconomic Convergencw IBRAHIM A. ZEIDY COMESA MONETARY INSTITUTE Presented at the Regional Workshop on Exchange of Experiences.

monetary affairs and finance, co-operate in monetary and financial matters and gradually establish convertibility of their currencies and a payments union as a basis for the eventual establishment of a monetary union”. This mandate is further reinforced in Articles 76-78 which respectively deal with the: COMESA Monetary and Fiscal Policy Harmonization (MFHP), Establishment of Currency Convertibility and/ 8 %. To achieve such performance in the current environment of the COMESA economies requires high levels /


Debating an appropriate macroeconomic policy for South Africa’s Democratic Developmental State Presentation to HSRC International Policy Dialogue June.

way as to transform the structure of opportunity in the South African economy and to impact positively on the economy’s long-run growth trajectory. To achieve this, the most appropriate macroeconomic policy mix is: reconstructive fiscal policy and stabilising monetary policy with a floating exchange rate, as opposed to current policy proposals of: tight fiscal policy and expansionary monetary policy with a competitive exchange rate Some key assumptions The developmental state is concerned/


Copyright © 2012 Pearson Education. All rights reserved. Chapter 17 Output and the Exchange Rate in the Short Run.

in the short run A short-run model of output markets A short-run model of asset markets A short-run model for both output markets and asset markets Effects of temporary and permanent changes in monetary and fiscal policies Adjustment of the current account over time Copyright © 2012 Pearson Education. All rights reserved. 17-4 Introduction Long-run models are useful when all prices of inputs/


A. Fiscal Policy. The Keynesian View of Fiscal Policy n Keynesian theory highlights the potential of fiscal policy as a tool capable of reducing fluctuations.

interest rates attract capital from abroad. The New Classical View of Fiscal Policy u debt financing merely substitutes higher future taxes for lower current taxes, and thus, u budget deficits affect the timing of taxes, but /relationship between shifts in monetary policy and changes in output and prices. D. Stabilization Policy, Output and Employment Promoting Economic Stability -- Activist and Non-activist Views n Goals of Stabilization Policy: n Activists Views of Stabilization Policy: u A stable growth/


16. EMU: ECONOMIC AND MONETARY UNION 1. Why EMU, such a unique experiment? 2. The institutional setup of EMU 3. EMU: the first decade (when all wen well,

to fall  Competitiveness problems for crisis countries: need for lower wages  Monetary policy, arguably not loose enough  Fiscal policy after 2009 tight, particularly so in the crisis countires: austerity reduces growth and increases unemployment, in some cases to dramatic levels 25 Crisis: a typical /, ETLA. 1. Real interest rate 2. Credit expansion 3. Housing prices 4. Domestic demand 5. Unit labor costs 6. Current account 7. Budget balance 8. GDP growth 9. Unemployment rate 1.5 295.6 109.1 2.4 34.0 -5./


AP/ Honors Macroeconomics Unit 4 Notes and Terms Fiscal and Monetary Policy.

Stimulus Package by category- Link to larger graphicLink Problems of Timing Recognition Lag Administrative Lag Operational Lag Political Considerations Political Business Cycle Future Policy Reversals Offsetting State and Local Finance Crowding-Out Effect Current Thinking on Fiscal Policy Problems, Criticisms, and Complications of Fiscal Policy O 11.2 2009 Stimulus Package by year in which money is spent- Link to larger graphic.Link 20. Barter- Trading of goods/


NMIMS University Mumbai Part-time MBA - Finance Dipankar De Mumbai, March 2011 Issues in Monetary & Fiscal Interface.

the difference between Government expenditure and net lending on the one hand and current revenue and grants on the other. This was the first official recognition of the concept of fiscal deficit. 20 Inter-relationship between Monetary, Fiscal and Debt Management Policies The fair ly underdeveloped state of the Government securities market till the early 1990s was a critical hindrance for a successful coordination between monetary and debt management. With the/


Unit 4 Exam GDP/Inflation/Unemployment Monetary & Fiscal Policy.

Unit 4 Exam GDP/Inflation/Unemployment Monetary & Fiscal Policy Who creates fiscal policy? Who creates fiscal policy? Government Government Congress & President Congress & President What monetary policy tool is the Fed using when it sells government bonds? What monetary policy tool is the Fed using when /less: Due to this, the dollar buys less: Inflation Inflation What term best describes the period between March and October, 2009? Deflation In how long does a person need to have inquired after a job to be /


Home of the 7 Board of Governors Ben Bernanke

money has decreased. e. real output has decreased. c. price level has increased. combinations of monetary and fiscal policy actions? 13. (54%) Policy-makers concerned about fostering long-run growth in an economy that is currently in a recession would most likely recommend which of the following combinations of monetary and fiscal policy actions? Monetary Policy Fiscal Policy a. sell bonds reduce taxes b. sell bonds raise taxes c. no change raise taxes d/


Macroeconomic Policy Objectives

Current account not so much in deficit to be unable to repay foreign debt not so much in surplus that foreigners can’t repay their debts Achieving Internal and External Balance Pegged rates Fiscal policy effective Exchange rate can be changed Devaluation/revaluation Tools: Expenditure changing: fiscal policy/exchange rates have roughly reflected fundamental changes in monetary and fiscal policies and not destabilizing speculation. Experience with floating exchange rates contradicts the idea that arbitrary exchange rate/


Thorvaldur Gylfason IMF Institute/Center for Excellence in Finance, Slovenia Course on Macroeconomic Management and Financial Sector Issues Ljubljana,

a role during Great Depression, even if theory behind it was poorly understood, or even disputed  Fiscal policy plays key role in current crisis Monetary policy is ineffective if real interest rates cannot be reduced without igniting inflation Fiscal policy is more effective Massive fiscal stimulus in US, Europe, and Asia: it works! Fiscal stimulus is assisted by automatic stabilizers  Need for financing tends to lift interest rates, so capital/


IMPLEMENTING NCM POLICIES: THE UK CASE

framework suggest? Is monetary policy so effective and fiscal policy so ineffective? Although the Chancellor sets the objective and target of monetary policy, there is clear difference of responsibilities between the MPC and the Treasury: monetary policy is conducted by the MPC; fiscal policy by the Treasury; There is still the possibility of conflict in terms of the objectives of monetary and fiscal policy; Economics of the UK Monetary Policy Should monetary and fiscal policies not be more closely/


1 How Macroeconomics has evolved Before and After the Global Crisis by Professor Assaf Razin Tel Aviv University and Cornell University EBA Special Lecture.

collapse 52 Interactions between monetary and fiscal policies The fiscal-multiplier debate 53 Multiplier smaller than one under flexible prices 54 Size of the Multiplier: Mitigating Factors Multiplier depends on pre existing public debt, on currency regimes, and the degree of openness Higher level of public debt provides a reason for permanently lower government purchases than would otherwise have been affordable. Hence, the current rise in spending/


The Financial Crisis and its consequences: The Re-emergence of Two School of Thought by Assaf Razin (June 2010) Lessons to be learnt about: De Grauwe)The.

collapse 30 Interactions between monetary and fiscal policies The fiscal-multiplier debate 31 Multiplier smaller than one under flexible prices 32 Size of the Multiplier: Mitigating Factors Multiplier depends on pre existing public debt, on currency regimes, and the degree of openness Higher level of public debt provides a reason for permanently lower government purchases than would otherwise have been affordable. Hence, the current rise in spending/


Output and the Exchange Rate in the Short Run

Copyright © 2009 Pearson Addison-Wesley. All rights reserved. Temporary Changes in Monetary and Fiscal Policy Monetary policy: policy in which the central bank influences the supply of monetary assets. Monetary policy is assumed to affect asset markets first. Fiscal policy: policy in which governments (fiscal authorities) influence the amount of government purchases and taxes. Fiscal policy is assumed to affect aggregate demand and output first. Copyright © 2009 Pearson Addison-Wesley. All rights reserved/


Slides prepared by Thomas Bishop Copyright © 2009 Pearson Addison-Wesley. All rights reserved. Chapter 16 Output and the Exchange Rate in the Short Run.

the short run A short run model of output markets A short run model of asset markets A short run model for both output markets and asset markets Effects of temporary and permanent changes in monetary and fiscal policies Adjustment of the current account over time Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 16-3 Introduction Long run models are useful when all prices of inputs/


The Worst Crisis in 75 Years: Origins, Magnitude and Response Jeffrey Frankel Harpel Professor of Capital Formation & Growth Harvard University The Boston.

priced very low, housing prices very high, housing prices very high, National Saving very low, National Saving very low, current account deficit big, current account deficit big, leverage high, leverage high, mortgages imprudent… mortgages imprudent… 3 US real interest rate < 0, / left. Obama’s economics are centrist, not far left. 39 Bottom line of macroeconomic policy response: A good guess is that the monetary and fiscal response we have seen so far have been sufficient to halt the economic free-fall, /


© 2003 McGraw-Hill Ryerson Limited. International Dimensions of Monetary and Fiscal Policy Chapter 17.

can pay them their profit and interest on their assets. 17 - 16 © 2003 McGraw-Hill Ryerson Limited. The Trade Balance Goal u In the short-run a trade deficit allows more current consumption, in the long/2003 McGraw-Hill Ryerson Limited. Monetary and Fiscal Policy’s Effect on International Goals 17 - 80 © 2003 McGraw-Hill Ryerson Limited. International Phenomena and Domestic Goals u Monetary and fiscal policy can work the other way around. u The monetary and fiscal policies of other countries can have /


International Monetary System, 1870–1973 Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 18-1.

fairly. Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 19-60 Since 1973 Due to contractionary monetary policy and expansive fiscal policy in the U.S., the dollar appreciated by about 50% relative to 15 currencies from 1980–1985.  This contributed to a growing current account deficit by making imports cheaper and U.S. goods more expensive. Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 19-61/


1 The Global Financial Crisis: Facts and Lessons for Economists by Professor Assaf Razin Tel Aviv University and Cornell University EBA Special Lecture.

collapse 41 Interactions between monetary and fiscal policies The fiscal-multiplier debate 42 Multiplier smaller than one under flexible prices 43 Size of the Multiplier: Mitigating Factors Multiplier depends on pre existing public debt, on currency regimes, and the degree of openness Higher level of public debt provides a reason for permanently lower government purchases than would otherwise have been affordable. Hence, the current rise in spending/


© 2014 Worth Publishers International Economics, 3e | Feenstra/Taylor

International Economics, 3e | Feenstra/Taylor 2 Goods Market Equilibrium: The Keynesian Cross Supply and Demand Given our assumption that the current account equals the trade balance, gross national income Y equals GDP: Aggregate demand, or/policy. If the economy is hit by a temporary adverse shock, policy makers could use expansionary monetary and fiscal policies to prevent a deep recession. Conversely, if the economy is pushed by a shock above its full employment level of output, contractionary policies/


Inflation, Unemployment, and Stabilization Policies: Review Questions

should be 2% rather than the current rate of 1.5%. The appropriate /policy is that: Only monetary policy works against recessions but fiscal policy is effective only in the long run. Both expansionary monetary and fiscal policies can reduce unemployment in the long run. Both expansionary monetary and fiscal policies are effective in the short run but not in the long run. Discretionary monetary and fiscal policies are effective in the short run and in the long run. Discretionary monetary and fiscal policies/


Economic Trends in Israel Macroeconomic Review General data General data General data General data Product and employment Product and employment Product.

Israel General data General data Product and employment Product and employment Balance of payments and external stability Balance of payments and external stability Fiscal policy Fiscal policy Monetary policy and inflation rate Monetary policy and inflation rate Balance of Payments and External Stability Balance of Payments and External Stability 1. Balance-of-payments 2. Foreign reserves 3. External Debt The Current Account millions of dollars & percent of GDP The current account of the balance of payments/


Macroeconomics of the Government Budget Anand Rajaram, Lead Economist, PRMPS Public Finance Analysis and Management Core Course PREM Learning Week, May.

composition for a number of reasons But current debate calls this approach into question Changing view of fiscal policy Prior to the Great Depression (1929-33), idea of balanced budgets - government should offset deficits incurred during war with surpluses during peacetime Keynes – activist fiscal (and monetary) policy should be used to manage aggregate demand and ensure full employment Through 1980s, 1990s – fiscal policy driven by concerns over macroeconomic imbalances - inflation/


Chapter 16 Output and the Exchange Rate in the Short Run Supplementary Notes.

. Explain these results carefully. Try! Effects of Permanent Changes in Fiscal Policy (cont.) An increase in government purchases raises aggregate demand Temporary fiscal expansion outcome When the increase of government purchases is permanent, the domestic currency is expected to appreciate, and does appreciate. Macroeconomic Policies and the Current Account What’s the effect of monetary and fiscal policies on the current account? We need the XX curve to represent the combinations of/


Macroeconomic Policy 14 Fiscal Policy & Monetary policy 14-1.

discount rate The Federal reserve zAssets Securities Loans to commercial bank zLiabilities Reserves of the commercial banks Treasury deposits Federal reserve notes Time Lags Regarding Monetary and Fiscal Policy  Time lags are delays in the economy ’ s response to stabilization policies. Two Possible Time Paths for GDP Path A is less stable — it varies more over time — than path B. Other things being equal, society/


Janet Yellen Janet Yellen 1%? 2%? 1.5%? The “Fed” Monetary Policy.

has decreased.e. real output has decreased. c. price level has increased. 13. (54%) Policy-makers concerned about fostering long-run growth in an economy that recessionrecommend is currently in a recession would most likely recommend which of the following combinations of monetary and fiscal policy actions combinations of monetary and fiscal policy actions? Monetary PolicyFiscal Policy a. sell bonds reduce taxes b. sell bonds raise taxes c. no change raise taxes/


FISCAL POLICY IN THE MONETARY UNION: THE STABILITY AND GROWTH PACT Week 7 Ch.10.

work without contraints on national fiscal policies”- the SGP 1) THE ROLE OF FISCAL POLICY IN A MONETARY UNION What is (macro) economic policy? a) Monetary policy: movement of short-term interest rate (i) in order to affect GDP (via consumption and investment) b) Exchange-rate policy: movement of nominal exchange rate (E) in order to affect balance of payments- current account (export minus imports) and GDP c) Fiscal policy : movement of government spending/


Unit Six Inflation, Unemployment, and Stabilization Policies Unit Six Inflation, Unemployment, and Stabilization Policies AP Macroeconomics MR. Graham.

and Stabilization Policies Unit Six Inflation, Unemployment, and Stabilization Policies AP Macroeconomics MR. Graham Do Now. How does fiscal policy happen? How does the Fed “do monetary policy” Explain the difference between fiscal and monetary policy. 3 Module 30: Long-run Implications of Fiscal Policy: Deficits and the Public Debt Module 30: Long-run Implications of Fiscal Policy: Deficits and the Public Debt Fiscal Policy/ Security, Medicare and Medicaid currently account for almost 40% of federal/


07 November 2006From the IIIE Islamabad1 Public Policies (Fiscal and Monetary) from an Islamic Perspective Sayyid Tahir International Institute of Islamic.

the economic activity 2-Distribution ─ redistribution of income and wealth through fiscal measures —The current emphasis is on Poverty Reduction. 3-Stabilization ─ macroeconomic management of the economy for alleviating unemployment, inflation and other socioeconomic evils DLP – 2006: Public Policies (Fiscal & Monetary) from Islamic Perspective Government in the Modern Age  20 Government in the Modern Age  DLP – 2006: Public Policies (Fiscal & Monetary) from Islamic Perspective C.The way in which a/


Lecture 32 Monetary and Fiscal Policy Instructor: Prof.Dr.Qaisar Abbas Course code: ECO 400.

SBP provides collateralized cash to bank(s). If required, changes in the Cash Reserve Requirement (CRR) and Statutory Liquid Reserve requirement (SLR) are also made. 10 Inherited Macroeconomics Imbalances Government inherited large macroeconomic imbalances owing to expansionary monetary and fiscal policies, with them having spillover effects on the current account but without adjustment of the exchange rate because of large capital inflows. 11 FY 05 FY/


Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 16-1 Introduction Long run models are useful when all prices of inputs and outputs have time.

-Wesley. All rights reserved. 16-50 Macroeconomic Policies and the Current Account To determine the effect of monetary and fiscal policies on the current account,  derive the XX curve to represent the combinations of output and exchange rates at which the current account is at its desired level. As income and output increase, the current account decreases, all other factors held constant. To keep the current account at its desired level, the domestic/


Fiscal Policy & Monetary Policy Government Test Review I do not set interest rates! I’m in charge of Taxes & Gov’t Spending.

on long term interest rates –This is known as crowding out The current Federal Deficit is a structural deficit –Entitlement spending must be addressed to correct it –TARP & Federal Stimulus will add 2 Trillion to our debt during 2009! –Debt could approach 100% of GDP in the next few years FISCAL POLICY Monetary POLICY 2 Types 2 Tools Goal For both: Expansionary Contractionary Loose Tight/


The Health of the Economy What is wrong and what can be done?

else is not counted... The buying of financial assets are not counted because they do not reflect current production. Secondhand sales do not count because the counted for the GDP of some previous year. Intermediate/ supply and increasing interest rates Open Market operations- sell securities Discount Rates- increase discount rates Reserve Requirements- increase requirements Prisoner’s Dilemma between Monetary and Fiscal Policy. Normally, high expenditures and is a dominate strategy for Congress and tight /


Relations Between the Balance of Payments and Other Macroeconomic Accounts Thorvaldur Gylfason Course on External Vulnerabilities and Policies Tunis, March.

Monetary approach to balance of payments  Domestic credit is a policy variable that involves both monetary and fiscal policy D  Can reduce* domestic credit (D) To private sector To public sector By reducing government spending By increasing taxes  Monetary and fiscal policy / in net international reserves Operations of the NFPS Total revenue and grants Total expenditure and net lending Current expenditure Wages and salaries Goods and services Interest Capital expenditure o/w fixed capital formation Net/


Chapter Sixteen Short-Run Macroeconomic Policy under Fixed Exchange Rates.

: Short-Run Effect of Fiscal Policy with Perfectly Mobile Capital Q i Q IB 0 LM 0 BOP 1 IS 1 0 26 Macroeconomic Policy with Perfectly Mobile Capital Monetary policy –Expansionary monetary policy (as depicted in Fig. 16.7’s shift from LM 0 to LM 1 ) initially lowers the domestic interest rate and raises income, resulting in capital outflows as well as a current-account deficit. The/


Unit 4 Exam GDP/Inflation/Unemployment Monetary & Fiscal Policy.

Unit 4 Exam GDP/Inflation/Unemployment Monetary & Fiscal Policy Who creates fiscal policy? Who creates fiscal policy? Government Government Congress & President Congress & President What monetary policy tool is the Fed using when it sells government bonds? What monetary policy tool is the Fed using when /less: Due to this, the dollar buys less: Inflation Inflation What term best describes the period between March and October, 2009? Deflation In how long does a person need to have inquired after a job to be /


U.S. Monetary Policy Since Late 2007 Winthrop P. Hambley Senior Adviser April 15, 2014 1.

interest rates (e.g. consumers’ wealth, current income, and confidence about the future; the availability of credit for consumer and business spending; government fiscal policies, economic conditions abroad...) affect spending. 9 How Traditional Monetary Policy Works (end) Traditional policy also affects spending indirectly by affecting asset prices and wealth, and exchange rates: Monetary policy affects asset prices, including stock prices and house prices, and thus affects household wealth, an important/


FED 100 400 300 200 500 Monetary Policy Monetary Policy 100 400 300 200 500 Fiscal Policy 100 400 300 200 500 Vocab. 100 400 300 200 500 ? 100 400 300.

400 1000 DDDD 200 800 600 400 1000 200 800 600 400 1000 End GameFinal JeopardyE Check Answer Given the current economic conditions, what would be the appropriate monetary and fiscal policies? What are limits to these policies? Final Jeopardy 1.Monetary= Lower RR, Lower DR, Buy Securities Fiscal = Tax cuts & increase spending 2. FED can’t force banks to loan money Gov’t can’t force people/


Jeffrey Frankel James W. Harpel Professor of Capital Formation & Growth, Harvard University Global Macroeconomic Address: The Impact of Current Economic.

for more, especially on the spending side. 30 Bottom line of macroeconomic policy response: The monetary and fiscal response was sufficient to halt the economic free-fall. The monetary and fiscal response was sufficient to halt the economic free-fall. It won’t /, Nigeria, S. Africa 5 Brazil, India & China; or BRICs excl. Russia. Global Growth Forecasts 69 The problem of global current account imbalances, especially the US CA deficit & China’s surplus, especially the US CA deficit & China’s surplus, was the /


Fiscal Policy and Monetary Policy CHAPTER 19 When you have completed your study of this chapter, you will be able to C H A P T E R C H E C K L I S T.

R C H E C K L I S T Describe the federal budget process and explain the effects of fiscal policy. 1 Describe the Federal Reserve’s monetary policy process and explain the effects of monetary policy. 2 19.1 THE BUDGET AND FISCAL POLICY Fiscal policy is the use of the federal budget to sustain economic growth and smooth the business cycle.  The Federal Budget The federal budget is an annual statement/


© RAINER MAURER, Pforzheim - 1 - Prof. Dr. Rainer Maurer Macroeconomics 3. The Neoclassical Model and its Policy Implications.

. Rainer Maurer Macroeconomics 3. The Neoclassical Model and its Policy Implications 3.1. The Structure of the Neoclassical Model 2.3. The Neoclassical Model and its Policy Implications 3.2.1. Monetary Policy 3.2.2. Fiscal Policy © RAINER MAURER, Pforzheim - 108 - Prof. Dr. Rainer Maurer ➤ There are two types of fiscal policy depending on their way of financing. ■ Debt Financed Fiscal Policy ■ Tax Financed Fiscal Policy ➤ If the government finances its consumption (G/


Fiscal Policy, Public Expenditure and Growth Anand Rajaram, PRMPS PFAM Course, PREM Learning Week April 23, 2007.

Public Finance to Policy Objectives Fiscal policy and the “Fiscal Space” debate Current thinking in the Bank Implications for Public Finance work Changing view of fiscal policy Prior to the Great Depression (1929-33), idea of balanced budgets - government should offset deficits incurred during war with surpluses during peacetime Keynes – activist fiscal (and monetary) policy should be used to manage aggregate demand and ensure full employment Through 1980s, 1990s – fiscal policy driven by concerns over/


Unit 4 Exam GDP/Inflation/Unemployment Monetary & Fiscal Policy.

Unit 4 Exam GDP/Inflation/Unemployment Monetary & Fiscal Policy Who creates fiscal policy? Who creates fiscal policy? Government Government Congress & President Congress & President What monetary policy tool is the Fed using when it sells government bonds? What monetary policy tool is the Fed using when /less: Due to this, the dollar buys less: Inflation Inflation What term best describes the period between March and October, 2009? Deflation In how long does a person need to have inquired after a job to be /


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