Fiscal Stabilisation Policy and Fiscal Institutions
Abstract
In this paper we analyse countercyclical fiscal policy within the context of a microfounded analysis of business cycle stabilisation. We show that tax and spending instruments can have a useful counter cyclical role, even after allowing for the distortionary nature of the instruments and the need for debt sustainability. A critical barrier to the use of fiscal instruments may be political economy concerns, and we survey recent suggestions involving alternative fiscal policy institutions.Download Info
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Paper provided by ESRC World Economy and Finance Research Programme, Birkbeck, University of London in its series WEF Working Papers with number 0007.
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Date of creation: Mar 2006
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Handle: RePEc:wef:wpaper:0007
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Keywords:Other versions of this item:
- Campbell Leith & Simon Wren-Lewis, 2005. "Fiscal Stabilization Policy and Fiscal Institutions," Oxford Review of Economic Policy, Oxford University Press, vol. 21(4), pages 584-597, Winter.
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- 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.
- Felicity C Barker & Robert A Buckle & Robert W St Clair, 2008. "Roles of Fiscal Policy in New Zealand," Treasury Working Paper Series 08/02, New Zealand Treasury.
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