From Stimulus to Consolidation
Title | From Stimulus to Consolidation PDF eBook |
Author | Mr.Benedict J. Clements |
Publisher | International Monetary Fund |
Pages | 122 |
Release | 2010-10-06 |
Genre | Business & Economics |
ISBN | 1616350423 |
This paper identifies policy tools that could be used for fiscal consolidation in advanced and emerging economies in the years ahead. The consolidation strategy, particularly in advanced countries, should aim to stabilize age-related spending in relation to GDP, reduce non-age-related expenditure ratios, and increase revenues. Bold reforms are needed to offset projected increases in age-related spending, particularly health care. On the revenue side, measures could include improving tax compliance, for example through better international cooperation, as well as increasing the yield from VAT by eliminating exemptions and reduced rates, further developing property taxes, and increasing excise rates within the range of rates already applicable in comparable countries.
From Stimulus to Consolidation - Revenue and Expenditure Policies in Advanced and Emerging Economies
Title | From Stimulus to Consolidation - Revenue and Expenditure Policies in Advanced and Emerging Economies PDF eBook |
Author | International Monetary Fund. Finance Dept. |
Publisher | International Monetary Fund |
Pages | 93 |
Release | 2010-06-07 |
Genre | Business & Economics |
ISBN | 149833735X |
This review marks the 10th anniversary of the safeguards policy. Introduced in March 2000, the policy’s main objective is to mitigate potential risks of misuse of resources, including Fund resources, and misreporting of monetary program data. The policy was last reviewed in 2005, when the Executive Board re-affirmed the effectiveness of the policy, and its application to central banks. In keeping with previous reviews, a panel of experts was invited to provide advice for the Executive Board on the implementation of the policy, and recommendations to guide the focus and application of the policy going forward.
The Economic Effects of Fiscal Consolidation with Debt Feedback
Title | The Economic Effects of Fiscal Consolidation with Debt Feedback PDF eBook |
Author | Mr.Marcello M. Estevão |
Publisher | International Monetary Fund |
Pages | 51 |
Release | 2013-05-31 |
Genre | Business & Economics |
ISBN | 1484304489 |
The past several years of recession and slow recovery have raised much interest on the effect of fiscal stimulus on economic activity, even as high public debts in many countries would call for fiscal consolidation. To evaluate the delicate balance between stimulus and consolidation requires measuring the size of fiscal multipliers, which often depends on having quarterly data so that exogenous fiscal policy shocks can be identified. We estimate fiscal multipliers using a novel methodology for identifying fiscal shocks within a structural vector autoregressive approach using annual data while controling for debt feedback effects. The estimation focuses on regions with scarce quarterly data (mostly low-income countries), and uses results for advanced economies, emerging market countries, and other broad groupings for which alternative estimates are available to validate the methodology. Differently from advanced and emerging market economies, fiscal consolidation in low-income countries has only a small temporary negative effect on growth while raising medium-term output. Shifting the composition of public spending toward capital expenditure further supports long-run growth.
Strategies for Fiscal Consolidation in the Post-Crisis World
Title | Strategies for Fiscal Consolidation in the Post-Crisis World PDF eBook |
Author | Mr.Mauricio Villafuerte |
Publisher | International Monetary Fund |
Pages | 64 |
Release | 2010-09-17 |
Genre | Business & Economics |
ISBN | 1589069374 |
In response to the global financial crisis, governments provided substantial support to the financial and other key sectors. Although this cushioned the adverse effects of the crisis, it is necessary now to articulate a strategy to ensure the sustainability of public finances. This paper discusses the scale and composition of fiscal adjustment that will need to occur once the recovery is securely under way. Although specific country-level circumstances will influence the composition of the adjustment and its political feasibility, in many cases restoring fiscal sustainability will require reforms to reduce spending and increase tax revenue.
Fiscal Policy and Long-Term Growth
Title | Fiscal Policy and Long-Term Growth PDF eBook |
Author | International Monetary Fund |
Publisher | International Monetary Fund |
Pages | 257 |
Release | 2015-04-20 |
Genre | Business & Economics |
ISBN | 1498344658 |
This paper explores how fiscal policy can affect medium- to long-term growth. It identifies the main channels through which fiscal policy can influence growth and distills practical lessons for policymakers. The particular mix of policy measures, however, will depend on country-specific conditions, capacities, and preferences. The paper draws on the Fund’s extensive technical assistance on fiscal reforms as well as several analytical studies, including a novel approach for country studies, a statistical analysis of growth accelerations following fiscal reforms, and simulations of an endogenous growth model.
Can Fiscal Consolidation Help Central Banks Fight Inflation?
Title | Can Fiscal Consolidation Help Central Banks Fight Inflation? PDF eBook |
Author | Mr. Jiaqian Chen |
Publisher | International Monetary Fund |
Pages | 51 |
Release | 2023-12-15 |
Genre | Business & Economics |
ISBN |
This paper argues case that a tighter fiscal policy stance can meaningfully support central banks in fighting inflation in both advanced and emerging market economies. While the standard textbook result suggest that monetary policy is much more effective than fiscal policy in battling inflation in open economies due to the exchange rate channel, we show that a tighter fiscal stance is notably more effective in the current situation. This is so because when many countries currently need to tighten the policy stance simultaneously, the exchange rate channel does not provide monetary policy with an edge over fiscal policy. We also show that fiscal consolidation can be helpful in small open emerging markets and developing economies by reaffirming their commitment to price stability, and by putting the fiscal house in order which reduces risk premiums and strengthens the currency. Furthermore, we show that spillovers from major economies can be more adverse from tighter monetary policy. By applying a two-agent New Keynesian modeling framework with unconstrained and hand-to-mouth households, we show that any adverse effects of tighter fiscal policy (relative to tighter monetary policy) on consumption inequality can be handled with a combination of general spending cuts and targeted transfers to vulnerable households.
Fiscal Adjustment for Stability and Growth
Title | Fiscal Adjustment for Stability and Growth PDF eBook |
Author | Mr.James Daniel |
Publisher | International Monetary Fund |
Pages | 80 |
Release | 2006-08-17 |
Genre | Business & Economics |
ISBN | 9781589065130 |
The pamphlet (which updates the 1995 Guidelines for Fiscal Adjustment) presents the IMF’s approach to fiscal adjustment, and focuses on the role that sound government finances play in promoting macroeconomic stability and growth. Structured around five practical questions—when to adjust, how to assess the fiscal position, what makes for successful adjustment, how to carry out adjustment, and which institutions can help—it covers topics such as tax policies, debt sustainability, fiscal responsibility laws, and transparency.