Macroeconomic Theory Chapter 5: Fiscal Policy Roles of Fiscal policy To provide automatic stabilizers to insulate the economy from shocks to AD (tax and social security). To stabilize output around eq. rate using discretionary fiscal policy (another policy).By niveditha
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The transmission mechanism of monetary policy. Banco Central do Brasil conference: “ One year of inflation targeting ” 10th July 2000 Alec Chrystal Bank of England www.bankofengland.co.uk. Structure of remarks.
Fiscal Policy. 3. 12. 12. 3. Budget Deficits & Surpluses. The Keynesian View of Fiscal Policy. The Keynesian View of Fiscal Policy. Rather than balancing their budget annually, Keynesians argue that counter-cyclical policy should be used to offset fluctuations in aggregate demand.
Fiscal Policy. Government Intervention in the Free Market ?. AD 2. However, Wages did not adjust. Classical Model Failure : The Great Depression. Real GDP ↓ 27% Unemployment 3% → 25% Price Level fell. Price Level. LRAS 1. AD 1. Real GDP. John Keynes 1883-1946.
Fiscal Policy. Using taxes and government spending to influence the economy. Who controls fiscal policy?. Each year the president and his advisors create a federal budget. Congress must approve that budget.
Fiscal Policy. Miscellaneous Notes Fall 2000 Economics 285. Main Tax Issues. Japan is not a “republic” so the national budget is key. In contrast, any analysis of the US must focus on state and local government You need to examine: The main budget Supplemental budgets
Chapter 11 and 15. Fiscal Policy. Fiscal Policy. The use of government taxes and spending to manipulate the economy. Types of Fiscal Policies. Discretionary Fiscal Policy Non-Discretionary Fiscal Policy. Discretionary Fiscal Policy.
Fiscal Policy. Revenues & Expenditures. Essential Standards. The student will explain how the government uses fiscal policy to promote price stability, full employment and economic growth. The student will define fiscal policy.
Fiscal Policy. IMF Fiscal Indicators. Crisis spreads to other countries. IMF Fiscal Monitor. Background Reading. Can you run a deficit every year?. Sustainable Deficit. If then Debt-to-GDP ratio stays stable. If > then deficit is “unsustainable” .
Fiscal Policy. Can you run a deficit every year?. Sustainable Deficit. If then Debt-to-GDP ratio stays stable. If > then deficit is “unsustainable” .
Fiscal Policy. Ways to finance government expenditures in Hong Kong. Tax revenue : direct and indirect taxes Non-tax revenue : sale of land, fees and charges ……. Past fiscal surplus ( 財政儲備 ) Selling government bonds ?. Classification by function: Types Economic services Security