IDEAS home Printed from https://ideas.repec.org/a/acb/agenda/v16y2009i4p25-36.html
   My bibliography  Save this article

Fiscal ‘stimulus’: A loanable funds critique

Author

Listed:
  • Anthony J. Makin

Abstract

This paper proposes an extended loanable-funds framework for examining the effects of fiscal stimulus on the budget balance, international borrowing, real interest rates, private saving, private investment and national income. It challenges the prevailing view that fiscal policy can be used effectively as an income ‘stimulus’ instrument, and proposes that discretionary fiscal measures that increase the budget deficit entail macroeconomic costs for significant external borrower economies, such as Australia, New Zealand and the United States.

Suggested Citation

  • Anthony J. Makin, 2009. "Fiscal ‘stimulus’: A loanable funds critique," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 16(4), pages 25-36.
    • Handle: RePEc:acb:agenda:v:16:y:2009:i:4:p:25-36
    as

    Download full text from publisher

    File URL: http://press-files.anu.edu.au/downloads/press/p88831/pdf/021.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John B. Taylor, 2009. "The Lack Of An Empirical Rationale For A Revival Of Discretionary Fiscal Policy," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(02), pages 9-13, July.
    2. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, March.
    3. Alan J. Auerbach, 2002. "Is there a role for discretionary fiscal policy?," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 109-150.
    4. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Anthony J. Makin, 2015. "Expansionary Versus Contractionary Government Spending," Contemporary Economic Policy, Western Economic Association International, vol. 33(1), pages 56-65, January.
    2. Anthony J. Makin, 2010. "How Should Macroeconomic Policy Respond to Foreign Financial Crises?," Economic Papers, The Economic Society of Australia, vol. 29(2), pages 99-108, June.
    3. Tony McDonald & Steven Morling, 2011. "The Australian economy and the global downturn, Part 1: Reasons for resilience," Economic Roundup, The Treasury, Australian Government, issue 2, pages 1-31, September.
    4. Tony Makin, 2012. "The Fiscal Policy Response to the Global Financial Crisis: A Critique," Chapters, in: Mohamed Ariff & John H. Farrar & Ahmed M. Khalid (ed.), Regulatory Failure and the Global Financial Crisis, chapter 6, Edward Elgar Publishing.
    5. Tom Valentine, 2011. "An Accelerator Tied to a Brake: Fiscal Stimulus Under a Floating Exchange Rate," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 18(1), pages 35-40.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anthony J. Makin, 2015. "Expansionary Versus Contractionary Government Spending," Contemporary Economic Policy, Western Economic Association International, vol. 33(1), pages 56-65, January.
    2. Taylor, John B., 2022. "The effect of the rescue plans and the need for policies to increase economic growth," Journal of Policy Modeling, Elsevier, vol. 44(4), pages 768-779.
    3. Wajid Ali & Asmat Khan & Asif Javed & Aamir Khan, "undated". "Does Private Saving Offset Public Saving In Pakistan An Emprical Evidence," Review of Socio - Economic Perspectives 202066, Reviewsep.
    4. Anthony J. Makin, 2010. "How Should Macroeconomic Policy Respond to Foreign Financial Crises?," Economic Papers, The Economic Society of Australia, vol. 29(2), pages 99-108, June.
    5. Hayford, Marc D., 2017. "The impact of temporary tax changes on consumption: 2000–2015," The Journal of Economic Asymmetries, Elsevier, vol. 15(C), pages 32-38.
    6. Anthony J. Makin, 2013. "The policy (in)effectiveness of government spending in a dependent economy," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 16(3), pages 287-301, September.
    7. Duclos, Jean-Yves, 1998. "Social evaluation functions, economic isolation and the Suits index of progressivity," Journal of Public Economics, Elsevier, vol. 69(1), pages 103-121, July.
    8. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 289-322, April.
    9. Thomas Carver & Arthur Grimes, 2019. "Income or Consumption: Which Better Predicts Subjective Well‐Being?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(S1), pages 256-280, November.
    10. Chul‐Woo Kwon & Peter F. Orazem & Daniel M. Otto, 2006. "Off‐farm labor supply responses to permanent and transitory farm income," Agricultural Economics, International Association of Agricultural Economists, vol. 34(1), pages 59-67, January.
    11. Bunting, David, 2009. "The saving decline: Macro-facts, micro-behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 282-295, May.
    12. Alfred Michael Dockery & Sherry Bawa, 2015. "The Impact of Children on Australian Couples’ Wealth Accumulation," The Economic Record, The Economic Society of Australia, vol. 91(S1), pages 139-150, June.
    13. Christopher D. Carroll, 2004. "Theoretical Foundations of Buffer Stock Saving," Economics Working Paper Archive 517, The Johns Hopkins University,Department of Economics.
    14. Jonathan Gruber & Aaron Yelowitz, 1999. "Public Health Insurance and Private Savings," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1249-1274, December.
    15. Duclos, J.Y., 1995. "Economic Isolation, Inequality, and the Suits Index of Progressivity," Papers 9510, Laval - Recherche en Politique Economique.
    16. Ansgar Rannenberg, 2019. "Inequality, the risk of secular stagnation and the increase in household deb," Working Paper Research 375, National Bank of Belgium.
    17. Gordon Anderson & Oliver Linton & Maria Grazia Pittau & Yoon-Jae Whang & Roberto Zelli, 2021. "On unit free assessment of the extent of multilateral distributional variation," The Econometrics Journal, Royal Economic Society, vol. 24(3), pages 502-518.
    18. Deleidi, Matteo & Iafrate, Francesca & Levrero, Enrico Sergio, 2020. "Public investment fiscal multipliers: An empirical assessment for European countries," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 354-365.
    19. Jung Sakong, 2021. "Effect of Ownership Composition on Property Prices and Rents: Evidence from Chinese Investment Boom in US Housing Markets," Working Paper Series WP-2021-12, Federal Reserve Bank of Chicago.
    20. Lang, Harald, 1987. "Herman Wold on Optimal Properties of Exponentially Weighted Forecasts," Working Paper Series 179, Research Institute of Industrial Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:acb:agenda:v:16:y:2009:i:4:p:25-36. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/feanuau.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.