Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Limits to Discretionary Fiscal Stabilization Policy

Contents:

Author Info

  • Wren-Lewis, Simon

Abstract

The use of discretionary fiscal policy as a counter-cyclical tool has declined in popularity over the last 30 years. This paper examines the extent to which this decline is justified in terms of developments in macroeconomic theory over this period. Both a small calibrated model and a larger econometric model suggest that the intertemporal consumer will smooth away most of the impact of temporary tax changes, even when additional discounting and credit constraints are allowed for. However, this analysis suggests a more powerful role for other forms of fiscal policy, such as government objections to the use of discretionary fiscal stabilization policy, and makes a tentative suggestion as to how these might be overcome. Copyright 2000 by Oxford University Press.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

Volume (Year): 16 (2000)
Issue (Month): 4 (Winter)
Pages: 92-105

as in new window
Handle: RePEc:oup:oxford:v:16:y:2000:i:4:p:92-105

Contact details of provider:
Web page: http://oxrep.oupjournals.org/

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Buti, M. & Eijffinger, S.C.W. & Franco, D., 2003. "Revisiting the stability and growth pact: Grand design or internal adjustment?," Open Access publications from Tilburg University urn:nbn:nl:ui:12-152958, Tilburg University.
  2. Philip Arestis, 2011. "Fiscal Policy Is Still an Effective Instrument of Macroeconomic Policy," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(2), pages 143-156, June.
  3. Philip Arestis & John McCombie, 2009. "On The Effectiveness Of Fiscal Policy As An Instrument Of Macroeconomic Policy," Economic Affairs, Wiley Blackwell, vol. 29(1), pages 77-79, 03.
  4. Heipertz, Martin, 2003. "The Stability and Growth Pact - Not the best but better than nothing. Reviewing the debate on fiscal policy in Europe's Monetary Union," MPIfG Working Paper 03/10, Max Planck Institute for the Study of Societies.
  5. Candelon, Bertrand & Muysken, Joan & Vermeulen, Robert, 2007. "Fiscal Policy and Monetary Integration in Europe: An Update," Research Memorandum 050, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  6. Christopher Allsopp, 2002. "Macroeconomic Policy Rules in Theory and in Practice," Discussion Papers 10, Monetary Policy Committee Unit, Bank of England.
  7. Lars Jonung & Martin Larch, 2004. "Improving fiscal policy in the EU: the case for independent forecasts," European Economy - Economic Papers 210, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  8. Lars Calmfors & Giancarlo Corsetti & John Flemming & Seppo Honkapohja & John Kay & Willi Leibfritz & Gilles Saint-Paul & Hans-Werner Sinn & Xavier Vives, 2003. "Fiscal Policy and Macroeconomic Stabilisation in the Euro Area: Possible Reforms of the Stability and Growth Pact and National Decision-Making-Processes," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 46-75, 05.
  9. Javier J. Pérez & Paul Hiebert, 2002. "Identifying endogenous fiscal policy rules for macroeconomic models," Economic Working Papers at Centro de Estudios Andaluces E2002/06, Centro de Estudios Andaluces.
  10. Rosaria Rita Canale, 2010. "Central Bank Reaction to Public Deficit and Sound Public Finance: The Case of the European Monetary Union," Journal of Advanced Studies in Finance, ASERS Publishing, vol. 0(1), pages 4-17, June.
  11. Pavlina R. Tcherneva, 2013. "Reorienting Fiscal Policy: A Critical Assessment of Fiscal Fine-Tuning," Economics Working Paper Archive wp_772, Levy Economics Institute.
  12. Goyal, Ashima, 2002. "Coordinating monetary and fiscal policies: a role for rules?," MPRA Paper 29200, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:oup:oxford:v:16:y:2000:i:4:p:92-105. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.