Fiscal policy measures are a key means by which governments can influence distribution and poverty, but in fact the relationships between fiscal policy and poverty are not well understood. The most commonly used technique for assessing the distributional impact, benefit incidence analysis, is straightforward, but applied by itself it suffers from a number of serious limitations. Assessment of t...

To develop a federal budget process that delivers better fiscal outcomes for the nation consistently over an extended period would require new information and analysis, applying these to decisions through properly designed procedures, and strengthening the institutions that support wise fiscal choices. Changes in each of these process components intended to contribute to good fiscal outcomes ar...

Do preferences toward globalization strategies vary across publicfinance regimes? In this paper, we use data on individual preferences toward immigration and trade policy to examine how pre-tax and posttax cleavages differ across globalization strategies and state fiscal jurisdictions. High exposure to immigrant fiscal pressures reduces support for freer immigration among U.S. natives, especial...

Within the non-stochastic dynamic general equilibrium model framework this paper examines the implications of alternative fiscal consolidation programs for small open economy. The calibrated model enables realistically quantify the impact of the deficit financing and fiscal consolidation on consumption and saving of households, investment of firms and thereby on the capital stock and real inter...

Fiscal Union Consensus Design under the Risk of Autarky* Inspired by the current debate over the future of the monetary union in Europe, this paper provides a simple model for the determination of the conditions of survival of the common good, which requires the creation of an effective fiscal union. We highlight the importance of institutional design and varying decision weights for the enlarg...

Our goal is to understand the response of bond returns to the government’s fiscal imbalances. We offer a framework that defines fiscal imbalances and links them to returns on government bonds. We show that our measure of fiscal imbalances contains significant information about future returns on the government’s debt portfolio up to two years. We also show that fiscal imbalances have significant...

The Great Recession and worldwide financial crisis have exploded fiscal imbalances and brought fiscal policy and inflation to the forefront of policy concerns. Those concerns will only grow as aging populations increase demands on government expenditures in coming decades. It is widely perceived that fiscal policy is inflationary if and only if it leads the central bank to print new currency to...

The fiscal position of many countries is worrying – and getting worse. Should formally independent central bankers be concerned about observed fiscal excesses spilling over to monetary policy and jeopardizing price stability? To provide some insights, this paper tracks the interactions between fiscal and monetary policies in the data across time and space. It makes three main contributions. The...

This paper evaluates the interacted effects of the fiscal and monetary policies on the nominal and real macro-variables of the Iranian economy. Our analysis is thus based on the optimal control theory by which the optimal path of the control variables including monetary and fiscal tools are determined over the period 1963-2006. We also use a macro-econometric model in form of a simultaneous equ...

Fiscal policy has been of significant size in Japan since the early 1990s, propelling Japan to the forefront of fiscally-challenged nations. However, the effect of fiscal policy has been disappointing. This paper discusses the various explanations provided by the literature (the argument that fiscal policy was effective; the argument that it was not effective, because of interest rate-based cro...