The role of fiscal policy in Japan: a quantitative study

This paper analyzes the role of fiscal policy in the recent slowdown in Japan. A dynamic general equilibrium model is developed in which fiscal policy can have both expansionary effects (through increasing returns) and contractionary effects (through the increase of public debt and tax burden). A version of the model is calibrated to the Japanese economy and is used to measure the importance of both these effects. We find that, under a wide range of parameters, net expansionary effects are quantitatively small, thus suggesting a limited role for fiscal stabilization     

Stable and enforceable: a new fiscal framework for the Euro area

Since the great financial crash, the need for new fiscal rules to prevent unsustainable fiscal policies is universally recognised. In practice such rules, including those in the Stability and Growth Pact, have proved to be impossible to enforce. Thus, to avoid unsustainable fiscal policies reappearing, and to prevent monetary policy from being undermined by undisciplined governments, there is a need for a framework capable of imposing fiscal discipline. This paper considers an intertemporal assignment, where fiscal policy focuses on long-term objectives and monetary policy on short-term stabilisation. We argue for public sector debt targets as a practical way to achieve such a set up, and an excess debt protocol is constructed to give enforceable form to those targets. The ideas of “fiscal space” and optimal debt levels are used to provide a mechanism for identifying a stable region within which the debt targeting regime should operate. Making these factors explicit would both improve the credibility of planned fiscal policies and reduce risk premia on borrowing costs. We finally show how Europe’s competitiveness pact, and debt restructuring operations, can be used to maximise the available fiscal space.     

基础设施对区域发展的重要作用

经济区域的发展与基础设施的建设息息相关。我们身处中国开放前沿的外向型经济区域,从中国改革开放之初,就更加深切感受到基础设施对区域发展的重要作用。我认为从广义基础设施来讲,可以分为三种类型:第一种是资源型基础设施,通常被称为硬环境;第二种是管理型基础设施;第三种是环境型基     

Innovation centres: The policy options for local authorities

Over the last few years a growing number of local authorities have set up Innovation Centres (ICs) as part of their repertoire of initiatives aimed at local economic regeneration. According to the recently formed Association of Innovation Centre Executives, ICs exist to provide assistance to both individuals and small firms with the creation and development of new and improved products and processes which can demonstrate market potential. Yet a review of the experience of ICs to date reveals that there is no standard model of an IC that can be taken off the shelf. Roger Leigh and David North seek to clarify the various options and choices that are available to a local authority contemplating setting up an IC, using information and insights gained from a series of interviews with IC managers carried out in 1985.     

Strategies for fiscal consolidation in Japan

Japan's key fiscal challenge is to put public finances on a more sustainable footing. This paper investigates the macroeconomic implications of alternative fiscal strategies for Japan using the IMF's Global Fiscal Model. The results suggest that (i) an adjustment package that achieves primary balance through lower social transfers and government spending and a higher VAT is the most viable option and has a smaller negative impact on growth than other fiscal measures; (ii) achieving primary balance is not sufficient to stabilize the net debt ratio; (iii) prefunding future aging costs provides greater long-term benefits compared with less front-loaded strategies; (iv) tax reform involving shifting from corporate taxation to consumption taxation could mitigate the short-term output losses associated with fiscal consolidation; (v) the spillovers to the rest of the world from consolidation in Japan are positive in the medium term, but modest.     

The role of regulation, fiscal incentives and changes in tastes in the diffusion of unleaded petrol

This paper analyses the diffusion of unleaded petrol in theUK. Changes in the market share of unleaded fuel are the resultof changes in the composition of the car stock and changes inthe choice of fuel given the car stock. We find that fuel typechoices have been mainly driven by changes in tastes and learningas opposed to changes in relative prices induced by fiscal incentives.However car stock composition effects dominate the diffusionprocess and we find that through this route regulatory changeshave made major contributions to changes in the market shareof unleaded fuel.     

ECB Foreign Exchange Intervention and the EURO: Institutional Framework,News, and Intervention

Using a unique intervention news data set, this paper investigates the impact of ECB intervention and intervention-related news (newswire reports) on the Euro exchange rate. A time-series study of news generated by ECB officials and market participants regarding intervention and the value of the Euro as well as an event study of firm reports of ECB intervention is conducted. Both studies find significant short-run effects on the Euro value, while only negative statements (official statements denying past intervention or ruling out future intervention) appear to have persistent effects.     

科技部党组:在战胜疫情中发挥科学技术的关键利器作用

新冠肺炎疫情发生后,以习近平同志为核心的党中央始终把人民群众生命安全和身体健康放在第一位,把疫情防控作为头等大事来抓,及时制定疫情防控方针政策。习近平总书记亲自指挥、亲自部署,果断采取有效措施,推动疫情防控不断向积极向好的态势拓展。     

坚持海关创新 加速滨海新区发展的进程

天津滨海新区发展纳入国家经济社会发展"十一五"规划,滨海新区迎来了前所未有的发展机遇.加快滨海新区的开发开放,对于改变我国经济发展南高北低、东快西慢,促进区域经济协调发展,促进中国经济与东北亚区域经济合作乃至深度融入世界经济,都将具有十分重要的经济和政治意义.     

A framework for intergovernmental fiscal relations in South Africa

South Africa is in the process of developing a new governmental structure. In this paper the principles governing intergovernmental fiscal relations are examined. The main types of government and the conditions for an efficient decentralized structure, as well as the assignment of expenditure functions and tax bases to the various levels of government, are discussed. The inevitable imbalance between expenditure and revenue requirements at subnational level and possible remedies are noted. General guidelines for the design of intergovernmental fiscal relations in a revised governmental structure are presented in conclusion.     

The Stability and Growth Pact: The appropriate fiscal framework for EMU

Developments in fiscal policies since the start of Economic and Monetary Union have time and again raised the question of whether the Stability and Growth Pact (SGP) provides an appropriate framework for fiscal policy coordination. Critics have argued that the SGP, in particular the set of rules specifying the application of the 3% deficit reference value of the Maastricht Treaty, is too rigid as it could force countries to restrain fiscal policies in difficult times and exacerbate cyclical volatility. Moreover, the SGP has been accused of inhibiting growth by limiting useful public expenditure (e.g. on investment). Supporters argue that the SGP provides a constructive, and indeed indispensable, framework for fiscal policies in Monetary Union. It is credited with securing stable and sustainable public finances within adequate bounds of flexibility. In the current dire state of public finances in many Member States and at the euro area level, this debate has reached a new peak.I would like to thank Philipp C. Rother for his valuable contributions.     

Monetary vs. fiscal policy: Some evidence from vector autoregression for India

This paper investigates the relative importance of monetary and fiscal policy for India. Unlike previous studies, a more general approach of multivariate vector autoregression has been employed. Analysis of the causality results based on the joint F-tests and the dynamic multipliers based on the variance decompositions and the impulse response functions unambiguously support the Keynesian stance on the importance of fiscal policy. There is very little evidence of exogeneity of money supply, undermining the validity of the monetarist proposition. On the contrary, Indian monetary policy appears to have accommodated changes in government expenditure, prices and output, lending support to the structuralist-Mundellian views.     

Solvency and sustainability of fiscal policies in the EU

Summary This paper focuses on the sustainability and solvency issues of the public sector. Tests for sustainability heavily rely on the time-series properties of the debt-to-GDP ratio, whereas solvency test focus on the deficit inclusive of interest payments. Sustainability and solvency tests are applied first on 8 ERM countries during the period 1970–1994. Subsequently, we concentrate on historical evidence (from 1870 onwards) for the Belgian central government. This long-term view allows for a more accurate time-series analysis. On the one hand, we find historical support for the hypothesis that high and persistent deficits for some periods can be consistent with the present-value budget constraint (solvency), provided that policies are changed eventually. On the other hand, the much stronger requirement of sustainability is not fulfilled since we do not find a tendency of the debt ratio to return to a constant long-run equilibrium level.Previous versions of this paper were written while F. Vanhorebeek was a research assistant at the Department of Economics, Catholic University of Leuven. We are grateful to W. Asma; G. de Bruyne, N. Demeester and two anonymous referees for their comments regarding the paper's methodology. We have also benefited from useful conversations with E. Buyst and P. Clement on the subject of this paper, as well as from their help in obtaining historical data. Remaining errors are ours. The opinions expressed here are solely those of the authors and should not be attributed to any other person affiliated with the Planning Bureau or the University.     

Over-optimistic official forecasts and fiscal rules in the eurozone

Eurozone members are supposedly constrained by the fiscal caps of the Stability and Growth Pact. Yet ever since the birth of the euro, members have postponed painful adjustment. Wishful thinking has played an important role in this failure. We find that governments’ forecasts are biased in the optimistic direction, especially during booms. Eurozone governments are especially over-optimistic when the budget deficit is over the 3 % of GDP ceiling at the time the forecasts are made. Those exceeding this cap systematically but falsely forecast a rapid future improvement. The new fiscal compact among the euro countries is supposed to make budget rules more binding by putting them into laws and constitutions at the national level. But biased forecasts can defeat budget rules. What is the record in Europe with national rules? The bias is less among eurozone countries that have adopted certain rules at the national level, particularly creating an independent fiscal institution that provides independent forecasts.     

Russian enterprises in Spring 2016: Interactions with state authorities in the midst of an economic depression

This article represents an analysis and discussion of the results of a regular survey of enterprises that operate in the real sector, which was held by the Institute of Economic Forecasting, Russian Academy of Sciences. This work reflects the opinions of Russian enterprises on the role the government should play in the economy. It presents the information on how often various governmental structures were described by the enterprises as over-bureaucratized and most corrupted structures. The article lists evaluations provided by the enterprises with regard to the current economic policy of federal and regional levels of authority. It contains data on the ongoing investment activity of enterprises, their short-term investment intents, and their procurements particularly concerning machinery and equipment. It lists comparative assessments in terms of the quality of Russian and foreign equipment.     

The search for the key: aid, investment and policies in Africa

The traditional aid-to-investment-to growth linkages are notvery robust, especially for African economies. Aid does notnecessarily finance investment and investment does not necessarilypromote growth. Differences in economic policy, on the otherhand, can explain much of the difference in growth performances.Furthermore, domestic politics rather than aid or conditionalityhas been the main determinant of policy reform. Where societiesand governments have succeeded in putting growth-enhancing policiesinto place, aid has provided useful support. The combinationof good policies and aid has created a productive environmentfor private investment and growth.     

Macroeconomic stabilization through monetary and fiscal policy coordination: Implications for European Monetary Union

In a two-country model, we consider the implications of monetary and fiscal policy coordination for macroeconomic stabilization. We show that the optimal regime is one of monetary and fiscal policy coordination under flexible exchange rates. In the context of the European Community, this suggests that the desire to fix exchange rates may not be costless. In addition, we show that fiscal coordination requires a relatively high degree of flexibility in fiscal policy. This result suggests that limits on the flexibility of fiscal policies, as suggested in the Delors Report, may hinder macroeconomic stabilization.