Regime changes and the sustainability of fiscal imbalance in East Asian countries

The main purpose of this paper is to assess empirically the fiscal policy regimes in five Asian countries using a formal framework based on the government's intertemporal budget constraints (GIBC). To this end, we relied on an array of time-series methods and quarterly data of nearly three decades. Our conclusions are; first, the evidence indicates that the fiscal stance in Thailand and South Korea are on their sustainable path while the Philippines and Malaysia demonstrate only ‘weak sustainability’. Second, revenues are growing at a rate faster than government spending for Singapore, a country that has recorded large surpluses for most of the sample period. Third, the results show a one-way causation from expenditure to revenue for Korea, Singapore and Thailand. This finding indicates that reducing the size of government spending may improve fiscal budget deficits without having to undergo changes in the overall strategy. Fourth, we observed a long-run feedback causality in the revenue–expenditure nexus for the case of Malaysia and the Philippines, which may require fiscal synchronization instrument policies to moderate the post-crisis fiscal imbalances. Together, the results demonstrate diverse fiscal patterns but they should be useful to understand the complexities of economic integration in the region.     

The sustainability of the current account in the Czech Republic,Hungary and Slovenia

The aim of this paper is to investigate empirically the sustainability of the current account in three Central European countries, the Czech Republic, Hungary and Slovenia, since their move towards market economy about 15 years ago. The analysis is based on the intertemporal approach to the current account which states that if real exports and real imports are integrated of order one then cointegration between them is a necessary and sufficient condition for the economy to satisfy its intertemporal budget constraint. On the basis of various unit-root and cointegration tests on the shares of real exports and imports in real GDP, this study concludes that the Czech Republic and Slovenia are not in violation of their intertemporal budget constraint and their trade imbalances are sustainable. However, the real exports and imports of these countries, and also the export, import measures of Hungary, do not seem to behave as random walks, excluding the possibility of cointegration between them.      

The identification of fiscal and monetary policy in a structural VAR

Good economic management depends on understanding shocks from monetary policy, fiscal policy and other sources affecting the economy and their subsequent interactions. This paper presents a new methodology to disentangle such shocks in a structural VAR framework. The method combines identification via sign restrictions, cointegration and traditional exclusion restrictions within a system which explicitly models stationary and non-stationary variables and accounts for both permanent and temporary shocks. The usefulness of the approach is demonstrated on a small open economy where policy makers are actively considering the interaction between monetary and fiscal policies.     

Stepping on a rake: The role of fiscal policy in the inflation of the 1970s

The inflation of the 1970s in the US is often discussed as if the only type of policy action that could have prevented the inflation were monetary policy actions and the only type of policy errors that might have induced the inflation were monetary policy errors. Yet fiscal policy underwent dramatic shifts in the 1970s and economic theory makes clear that in an environment of uncertainty about future fiscal policy, monetary policy instruments may lose potency or have perverse effects. This paper documents the vagaries of fiscal policy in this period and argues that people at the time must have been uncertain about fiscal policy's future course. It also lays out a theoretical framework for understanding the effects of fiscal uncertainties on monetary policy and shows that fiscal variables have predictive value in dynamic models, even if traditional monetary policy indicators are included in the system.     

The sustainability and transition of economic growth in China：from a perspective of factor structure

After more than 20 years＇ high speed growth, the sustainable growth of Chinese economy faces serious limitation of resources and factors now and in the future. In order to maintain the economic growth. China has to trans-form the way of economic growth, Based on the analysis on the related theories of economic growth and the structural transformation in factors of production, this paper proposes that the transformation of the economic growth way has to impel the optimization and the promotion of the utilization structure of factors of production. Finall.v, based on the analysis of the necessity to change the pattern of economic growth, this paper proposes＇ the strategic measures to promote the continuous economic growth and the transformation of patterns of economic growth.     

The reduction of the UK budget deficit: a human rights perspective

This paper contributes to new thinking in economics by employing a human rights perspective to examine the budget deficit reduction strategy of the UK coalition government, as set out in 2010 in the June budget and October Spending Review. Focusing on economic and social rights, the paper explains the human rights obligations of governments and key human rights principles. As examples of how they should be applied to examine the deficit reduction strategy, it examines the implications of the policy changes for child poverty and gender equality, and finds that in both cases there is evidence to suggest non-compliance with the human rights obligations of the UK government.     

Deficit sustainability and inflation in EMU: An analysis from the Fiscal Theory of the Price Level

Price determination theory typically focuses on the role of monetary policy, while the role of fiscal policy is usually neglected. From a different point of view, the Fiscal Theory of the Price Level takes into account monetary and fiscal policy interactions and assumes that fiscal policy may determine the price level, even if monetary authorities pursue an inflation targeting strategy. In this paper we try to test empirically whether the time path of the government budget in EMU countries would have affected price level determination. Our results point to the sustainability of fiscal policy in all the EMU countries but Finland, although no firm conclusions can be drawn about the prevalence of either monetary or fiscal dominance.     

The Effects of Fiscal Consolidation and Welfare Composition of Spending on Electoral Outcomes: Evidence from US Gubernatorial Elections between 1978 and 2006

This study attempts to make a contribution to the field of spending aspects of fiscal policy and their impacts on electoral outcome. Due to varying degrees of financial responsibilities and commitments to provide public goods and services, US state governments serve as a perfectly natural laboratory to test the electoral significance of fiscal policies. We adopt a probit model, with several specifications, to determine significant impacts of fiscal consolidation and increases in welfare spending on US gubernatorial elections from 1978 to 2006. The analyses show that voters are more concerned about the increase in debt than current budget deficits. An increase in welfare spending is negatively associated with reelection. Moreover, the impact of taxation on gubernatorial elections turns out to be insignificant. In particular, findings suggest that the political business cycle model does not hold true in US gubernatorial elections. Expansionary fiscal policy right before the election may not have crucial impacts on the chances of an incumbent winning the election.     

我国住房保障体系非均衡供给的实证分析

基于我国住房保障体系的发展现状,就我国住房保障体系主体(经济适用房)的非均衡供给作了实证分析,得出全国经济适用房非均衡计量经济模型和非均衡度的量化结果,通过对回归结果的考察,最后基于融资角度提出构建PPP模式的住房保障体系的政策建议。