Inequality, fiscal policy and COVID19 restrictions in a demand-determined economy

On the Inequality Effects of Fiscal Policy

increasing concern with income distribution effects rather than growth effects of government activities has prompted numerous incidence analysis of government tax and expenditure behavior, in this paper, the extent of government contributions to changes in income inequality is analyzed for the Iranian economy. Some major findings of this research is that income distribution in urban areas was m...

Fiscal Policy in a Depressed Economy

This paper examines logic and evidence bearing on the efficacy of fiscal policy in severely depressed economies. In normal times central banks offset the effects of fiscal policy. This keeps the policy-relevant multiplier near zero. It leaves no space for expansionary fiscal policy as a stabilization policy tool. But when interest rates are constrained by the zero nominal lower bound, discretio...

Fiscal Policy Reforms in a Global Economy

The paper considers two countries each populated by workers and capitalists and equipped with a government that collects taxes to nance productive expenditure and income redistribution. The share of income redistributed de nes the size of the welfare state. Both groups in each country bene t from an abolition of the welfare state in the long run. Nevertheless, the optimal scal policy in autarky...

Optimal Fiscal Policy and Amplification in a Small Open Economy∗

We study optimal fiscal policy in a small open economy characterized by two main frictions – incomplete financial markets and an inability of the government to commit to policy. Our main contribution is to show that in this environment, the best sustainable policy can amplify and prolong shocks to output. In particular, the government’s credibility not to expropriate foreign capital endogenousl...

The political economy of fiscal policy: Survey