With fiscal year 2007 well under way, we write to report on the status of our budget for the National Heart, Lung, and Blood Institute (NHLBI). As a result of a Congressional joint resolution, the NHLBI received an allocation of $2 918 808 000, which represents an increase of 1% over the comparable figure for fiscal year 2006. The NHLBI has a longstanding and powerful commitment to preserve and...

Poland edged toward hyperinflation in the latter half of 1989, but inflation fell dramatically after drastic reforms were enacted in January of 1990. We analyze the consistency between fiscal deficits and inflation targets, and we assess Poland’s domestic and foreign debt management policies and the impact of the Brady debt reduction agreement on the relationship between fiscal deficits and inf...

The efficient decentralized provision of public goods requires that special interest groups, such as municipal unions, do not exercise undue influence on the outcome of municipal elections and local fiscal policies. We develop a new political economy model in which a union can endorse one of the candidates in a local election. A politician that prefers an inefficiently large public sector can, ...

Article history: Received 1 April 2010 Received in revised form 3 August 2011 Accepted 4 August 2011 Available online 11 August 2011 This paper uses a tri-variate structural VAR with a long-run identification scheme, akin to the Blanchard and Quah method, to identify external and domestic supply and demand shocks in 22 African countries between 1980 and 2005. Domestic supply shocks are found to...

In this paper we study jointly optimal fiscal and monetary policies in a small open economy framework with capital and sticky prices. We consider the case of distortionary taxes on labor and capital, and no public debt. As in a closed economy set–up, in the steady state, the optimal inflation rate is zero, as well as the optimal tax on capital. The dynamic properties of optimal monetary and fis...

The potential interactions among fiscal policies, investments and economic growth are complex and manifold. In this paper, we will perform a systematic comparative analysis of the various economic insights that are currently available on these complex relationships, both theoretically (by a selective literature review) and empirically (by investigating available data from various countries). De...

This article investigates the effects of macroeconomic policy (monetary and fiscal) on output growth during financial crises characterized by a “sudden stop” in net capital inflows in developing and emerging market economies. We investigate 83 sudden stop crises in 77 countries over 1982-2003 using a baseline empirical model to control for the various determinants of output losses during sudden...

Growth that is shared—so-called inclusive growth—is now widely embraced as the central economic goal for developing countries. But inclusive growth can mean different things to different people. In this essay inclusive growth is defined as growth that builds a middle class. Macroeconomic policies can shape the environment and incentives for inclusive growth by working toward three important goa...

A simple model of monetary/labor search is constructed to study Keynesian indeterminacy and optimal policy. In the model, economic agents have trouble splitting the surplus from exchange appropriately, and we consider monetary and fiscal policies that correct this Keynesian inefficiency. A Taylor rule does not imply determinacy, nor does it support an efficient outcome. Optimal policies yield a...