Hayashi and Prescott (2002) speculate that the anemic performance of the Japanese economy since the early 1990s can be understood in terms of how any ‘well-functioning’ private sector might react to an exogenous ‘productivity shock.’ In particular, they downplay the role of monetary and financial factors in shaping Japan’s ‘lost decade.’ But many view the monetary and financial developments in ...

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...

We analyse the impact of interactions between monetary and fiscal policy on macroeconomic stability. We find that in the presence of sovereign default beliefs a monetary policy, which aims to stabilize inflation through an active interest rate policy, will destabilize the economy if the feedback from debt surprises back to the primary surplus is too weak. This result, which relies on endogenous...

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...

based on the theoretical and empirical evidences, the most important goal the privatization is to increase the efficiency and improve the fiscal status of the government and the government enterprises. one of the key factors for implementation of the privatization policy in iran is to overcome the inefficiency and fiscal problems of the government sector. the paper studies the privatization per...

Most economists and observers place the lack of fiscal discipline at the core of the recent Argentine crisis. This begs the question of how countries like Belgium or Italy (pre-Maastricht) could run large fiscal deficits and accumulate debts far beyond those of Argentina, without experiencing crises nearly as dramatic as that of Argentina? Why is it that Argentina cannot act like Belgium or Ita...

In this paper we evaluate the sustainability of the current fiscal policy regime in Poland, which has been in place for almost 10 years since the start of the economic reform process. We use the intertemporal budget constraint (IBC) as a framework, and evaluate the sustainability of current policies. Consistency of fiscal policy with the IBC is evaluated using unit root and cointegration tests....

Using the standard real business cycle model with lump-sum taxes, we analyze the impact of fiscal policy when agents form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government purchases are significantly higher under learning, and fall within empirical bounds reported in the literature (in sharp contrast to the implausibly low values ...