We study analytically the conflict of goals between stabilizing economic activity and public debt sustainability, for the fiscal authorities. In the short run, an active and expansionary fiscal policy, increasing public investment or reducing the labor taxation rate, is growth enhancing. However, as these short term fiscal policies also decrease government revenue and increase the public debt, budgetary and fiscal multipliers are reduced in the long run. In the framework of a potential ZLB constraint for monetary policy, an expansionary fiscal policy is thus appropriate only if long term labor and consumption taxation rates are small, and if the share of public expenditure in GDP is high. On the contrary, fiscal policy should be contractionary, in order to insure the sustainability of the long term public debt, if long term labor and consumption taxation rates are high. A contractionary fiscal policy is then also all the more appropriate as the sensitivity of government expenditure to the public debt is high, and as the labor share in the production function is high.

In this study, I analyze the impact of the aggregate, income, corporate and social security tax revenues on both the U.S. output and the stock market return in a structural vector autoregression (SVAR) framework between 1960:Q1 and 2015:Q4. Unlike some of the other studies, I use aggregate and disaggregated tax revenue variables to examine the impact of scal policy. Results show that an increase in aggregate tax revenue reduces output and market return. In addition, an increase in income, corporate, and social security tax revenues reduces output and the market return signi cantly at varying degrees.

This paper attempts to introduce an overlapping generations structure into Paul Krugman's "The world's smallest macroeconomic model" (Krugman (1999)) to examine the implications of fiscal policy, particularly fiscal deficits, in a framework suitable for policy analysis. In that paper, Krugman argued that under the price rigidity assumption, a shortage in the money supply leads to underemployment and recession, so increasing the money supply would eliminate underemployment and restore full employment. But how can the money supply be increased? I show that in order to restore full employment out of a recession, a fiscal deficit is needed to increase the money supply. I also show that in a growing economy, fiscal deficits are necessary to maintain full employment at constant prices or inflation. Fiscal deficits are not only effective in pulling the economy out of recession, they are even necessary for growth to continue without recession or inflation. The fiscal deficit in this paper represents the difference between government spending and government revenues. If this difference is positive, we say that the government is in deficit. Krugman's original model is a one-period static model. I intend to extend this model to a dynamic overlapping generations model.

Motivated by the Blackorby-Schworm (1993) observation that market outcomes may differ from those originating in market-actor optimization, this paper claims that the number of banks in the market is larger than the number justified by bank profit maximization alone or in combination with bank depositor welfare maximization. This claim is made within the context of bilateral monopoly banks and intertemporal utility maximization by bank depositors. The basic policy implication towards bank population rationalization is a minimization of the deviation away from the optimal interest rate margin at every stage of the business cycle. It is meant to be an acyclical policy though the target of optimal bank population is attainable by active countercyclical policy as well. The nature of this policy issue makes the use of macroprudential measures imperative, jointly perhaps with a fiscal-monetary policy mix. A dynamic version of the model in a Cournot environment is akin to the modeling of Minsky's hypothesis of financial fragility.

The expansion of urban infrastructure is an important indicator of agglomeration and a major factor in the deterioration of the urban environment. The investment in urban infrastructure is accompanied by the sealing of ground. The implementation of effective policies to reduce the practice of sealing ground is impeded by the existence of conflicting interests and fiscal disincentives. A significant challenge is the dearth of policy-relevant information. Conventional analysis considers urban outcome indicators in proportion to population and neglects non-linear distribution patterns, thus obscuring global regularities that contain important information. The study contributes to a more comprehensive understanding of urban imperviousness through the lens of urban scaling. The present study employs Germany as a case study to examine the extent to which the parameters of the scaling function differ between two types of cities. District Affiliated Cities (DACs) and Administrative City Districts (ACDs), which are afforded greater fiscal autonomy. The analysis indicates that the amount of sealed land exhibited a notable increase between 2006 and 2018 in the ACDs. Calibration of the scaling functions for cities with the actual coefficient of the DAC control estimate and a global orientation exponent (5/6) resulted in a 16% reduction of sealed ground. In conclusion, urban scaling laws offer a valuable tool for analyzing the complex dynamics of urban imperviousness and its control costs, thereby contributing to the formulation of more effective urban policies and planning.

Numerous studies have explored the impact of family planning policies on income distribution, but the impact of policy relaxation remains largely unexplored. To address this gap, we investigate the effects of China's selective two-child policy, which was implemented in 2013, using provincial panel data from 2011 to 2016. Specifically, we employ a generalized difference-in-differences model to empirically analyze the impact and mechanism of the policy relaxation on residents' income distribution. Our findings are as follows. Firstly, the selective two-child policy has narrowed the income distribution gap. Secondly, male labor force participation, the urban-rural income gap, and disposable income serve as mechanisms through which the selective two-child policy affects income distribution. Thirdly, the robustness test confirms the robustness of our conclusions. Finally, we observe regional heterogeneity in the impact of the selective two-child policy on residents' income distribution. Specifically, the policy has had significant effects in the western and northeastern regions, but not in other regions. Overall, our results shed light on the impact of childbearing policies on income distribution, providing important insights for optimizing China's childbearing policies and promoting common prosperity.

This paper evaluates the fit-for-purpose of the monetary policy measures implemented by the Bank of Ghana in response to the COVID-19 pandemic. We examine the effectiveness of the BoG’s policy interventions in the context of vector autoregressions augmented with macroeconomic and financial indicators. We demonstrate that the BoG’s monetary policy measures have had nominal, real, and financial effects. The monetary interventions have been successful, as evidenced by the gradual reduction in the sovereign spread, improved financial stability, and increased real economic activity. Our findings suggest that balance sheet actions are less effective and should be moderated in the conduct of monetary policy in jurisdictions without zero lower bound constraints. However, the analysis indicates that in times of crisis, central banks should deploy both standard and non-standard tools to stabilize dysfunctional financial markets and avoid a deflationary spiral. The historical and variance decomposition of the data reveal that monetary policy shocks have historically made the largest contributions to the targeted macro-financial aggregates during the pandemic episodes.

Green credit policy (GCP) relies on financial means to promote environmental governance. Whether it can achieve the goals of economic development and environmental protection, especially in the context of different institutional supplies, remains to be scientifically tested. Based on the implementation of China’s Green Credit Guidelines in 2012, this study uses panel data of Chinese companies from 2009 to 2019 to explore the influence of GCP on green technology innovation and the role of institutional supply in it. The results show that GCP is instrumental in promoting green innovation in heavily polluting enterprises, and the promotion effect is heterogeneous based on green patent types, firms’ ownership, and regional financial development levels. Further analysis finds that the supply of environmental protection systems by local governments can strengthen the green innovation effect of GCP. However, the institutional supply of innovation has not yet released a promotional effect. This paper finds that green credit can be used as an environmental governance tool and provides inspiration for local governments to issue environmental protection policies scientifically.

Part of the present inflation is caused by the breakdown of globalization, in particular supply chains, part is caused by the Corona Pandemic, in particular lockdowns, part is caused by the Ukrainian War, part is caused by European sanctions, and part – and not the smallest one – is caused by the European Central Bank’s printing money by hook or by crook in the past and in the presence. This paper attributes inflation decisively to the overwhelming money creation by the European Central Bank.

The high price of energy due to green energy policy will cause adjustments across the US economy predicted in the present general equilibrium model that includes energy Btu input with capital and labor to produce manufactures and services. This same model in trade theory examines the effects of a tariff on an imported factor of production such as a natural resource or capital.  Corresponding error correction estimates of the reduced form equations of the model in annual 1970-2018 data prove robust and suggest model modifications. A parametric approach to noncompetitive pricing based on unit cost diminishing with output brings the model much closer to the estimates. Manufactures are revealed to have a higher degree of noncompetitive pricing than services. Assuming constant elasticity of substitution production, a weak degree is revealed to provide the best fit to the error correction estimates. The high price of green energy will cause an inelastic decrease in energy input resulting in increased energy revenue. Outputs of both sectors fall, more in manufactures due to its energy intensity. The capital return and wage also fall given the weak substitution of capital and labor relative to the price of energy. The wage rises slightly in the model but falls considerably in the error correction estimate. The only clear winner is energy input with increased revenue. The government owns a large share of hydrocarbon reserves and will benefit from a higher price of energy.

This paper presents an analytical framework to assess the probability of achieving nationally determined contributions (NDC). The prediction model based on the Kaya identity is used to simulate the pathway of carbon emission until the target year. Applying the modified STIRPAT framework (named CO-STIRPAT) to data observed in South Korea shows that the probability that the predicted pathway with existing climate technology will stay above the NDC target pathway is significantly high. The result suggests that it is necessary to design a climate policy to improve energy intensity and carbon intensity by accelerating the advance in climate technology.

Many of Keynes´s ideas and concepts are proven correct in this paper. The demand side, mainly business investments, drives the economy. Business firms steer the business cycle via profit expectations and animal spirits. Injections to and withdrawals from the circular flow of income are multiplied throughout the economy in accordance with Keynes´s multiplier. A sudden and sharp rise in households´ saving rates has a detrimental effect on aggregate demand, in line with Keynes´s paradox of thrift. Finance, not saving in the S=I sense, is the necessary condition for business investments and economic growth to be realized. Keynes´s finance motive thus makes money endogenous, contradicting the textbook result that exogenous money steers aggregate demand, contradicting the mainstream loanable funds theory and putting into question the Keynesian theory of sticky prices as a condition for real growth. However, a crucial omission in Keynes´s productive writings is the lack of an accelerator tying income to investment. Some of his followers such as Paul Samuelson tried to remedy that by developing multiplier-accelerator models. The problem with them is that the accelerator lacks micro foundations, in specific disregarding business confidence. Linking macro accounting identities with empirical national accounts data for five major economies produces the finding that business firms explain more than all aggregate expenditure growth during a 25-year period. Thus, it is concluded that business confidence is the root of the business cycle. Making the accelerator account for business confidence casts new light on the perhaps most well-known Keynesian “truth”: active fiscal policy as a main force stabilizing the business cycle. With business confidence being the endogenous and ubiquitous variable driving the business cycle, it turns out that any exogenous factor has the possibility to affect it. Policy needs to be viewed as a competing factor to the factor(s) driving the cycle in the other, destabilizing direction. The more powerful those factors are (e.g., a deadly virus), the tougher it gets for policy to “win” the competition, turning business confidence around. This leads up to the paper´s main conclusion: the worse the economy, the stronger is the case for active fiscal policy, but the lesser is the chance for it to succeed.

Traditionally, conditions of sustainability of the public debt have long been related quite exclusively to fiscal policy and to budgetary parameters. However, the interaction between fiscal and monetary policies regarding the fixation of the interest rate is fundamental. Indeed, a simple analytical modelling shows that if the nominal interest rate increases exponentially with the public debt, because of a default (credit) risk premium, if the confidence of investors is fundamental, conditions of sustainability of the public debt could be much more difficult to comply with. Indeed, if the interest rate is risk-free, values for which the public debt can be sustainable are less constraining if the long-term GDP growth rate is high, or if the long-term risk-free nominal interest rate is small. They are also less constraining if the country decides to turn to a non-negligible primary budget surplus in case of a high public debt. However, if the interest rate exponentially increases with the public debt level, in case of a significant importance of the default (credit) risk premium, these parameters have very limited consequences on sustainable and equilibrium public debt levels. The sustainable public debt that a government should target is then much smaller than in absence of this risk premium.

This research paper examines changes in patient care management in acute care hospitals between 2001 and 2011. During this time, there were two opposing factors at play: the competition effect of the reform and the policymaker’s decision to reduce public hospitals across France. By studying the trends, it is evident that there has been a significant overall shift in patient care management during this period. This change could be attributed to the global competition effect and the concentration of in-patients in specific public facilities. Through the difference-in-difference method, the study analyzed time variations in the intensity of local competition. It was found that local competition had a negligible impact on patient care management. Additionally, the study revealed that there was a significant positive competition effect on high-technical procedures for the private sector, which is in line with the market segment where private sector hospitals have a leadership position and the pro-competitive reform intensified this position. The study also uncovered a negative competition effect on the length of stay for public hospitals. Prior to the implementation of the DRG-based payment reform, public sector hospitals were paid a global budget. However, after the reform was implemented, they had to shorten the length of stay to increase the number of stays. For-profit hospitals have always been paid based on the number of stays. The results are robust and consistent when alternative measures of local competition are used.

Objective: The paper, specifically examines whether the recently formed Regional Comprehensive Economic Partnership (RCEP) can potentially facilitate minimising the constraints to renewable energy goods exports at the regional level in Asia. Data, Methodology and Findings: Using the panel data from 11 RCEP members from 2006 to 2014, this study has applied the ‘meta frontier stochastic gravity frontier’ methodology and confirms that the establishment of RCEP has the potential to improve trade in renewable energy commodities within the RCEP region. Policy Implications: The policy implication is that when countries work together, it will lead to enormous benefits for national, regional, and worldwide prospects of a more sustainable energy future. Practical Policy Implications: In terms of practical policy implications, the developed RCEP member countries should actively engage in promoting R&D activities and protecting intellectual property rights concerning renewable energy production, which are essential for countries to integrate with the world market and to lift the export frontiers of both the developed and developing RCEP member countries to reach the unrestricted export of renewable energy technology.

The paper addresses the alternative policy options available to address the question of lives versus livelihood in an SIRD model augmented with a macroeconomic structure. An important contribution of the paper lies in designing the policy of lockdown dependent on the extent of the constraint on the health facilities. The paper supplements the literature with a less stringent version of the lockdown policy, viz. soft lockdown policy which is shown to be more attractive from a public policy standpoint and has actually been practised in many countries across the globe during the recent pandemic. Finally, the optimal policy derived on the basis of the level of lockdown and adjustment of the binding constraint on health facilities depends on the objective of policy makers contingent on the relative weights of lives versus livelihood.

This paper examines impacts of China’s financial liberalization policy on income inequality, through three channels: financial scale, financial structure and financial efficiency, an empirical analysis based on panel data of 30 provinces in China from 1996 to 2013 is conducted. The results confirm the Kuznets effect between financial scale, financial structure and income inequality. As the size of the financial sector expands, the financial structure is tilted toward direct financing, and the income gap among residents will experience a "reverse U-shaped" trend that rises first and then falls. Most of China has not yet passed the turning point, and is still in the upper bound of the "inverted U-shaped" curve. Financial liberalization policies will continue to exacerbate income inequality. The impact of financial efficiency on income distribution is quite different in different regions of China. After dividing the whole China into three regions according to the degree of economic development, it is found that the financial efficiency of the eastern and western regions has a Kuznets effect on the income gap, but compared with the eastern region, more provinces and cities in the western region have entered the stage of reducing the income inequality, and the financial development has a great impact on the western region. The effects of financial development on central China are weak, and income inequality increases with financial efficiency.

This research paper investigates the policy impact of tariff, interest rate, and political stability on balance of payments among three income groups classified by the World Bank. The global panel data is taken from the World Bank from 2002 to 2022 and divided into three groups based on the classification on per capita income into High Income, Upper middle income, and Lower middle-income countries. This study explores how these variables impact balance of payments in different economic conditions and if their impact is different. The study employed in this paper is the Panel Least Squares, Fixed Effects Regression, GMM and Dumitrescu panel granger causality tests. The findings do confirm that these variables indeed have unlike impacts in the selected groups and the importance of tariff and interest rate as a policy tool cannot be sidelined. This research contributes to a deeper understanding of the complex relationship between macroeconomic variables within each income group also highlighting the importance of political stability for economic outlook.

Generating output growth by adding more inputs into the production process may not be sustainable in the long run for any economy, given the limited resources. On the other hand, if productivity growth dominates the production process, it will generate more output without excessive increase in input use. Hence, this paper examines whether the output growth in Indonesia’s manufacturing sector is excessive inputs driven or productivity driven. Productivity driven growth is measured by Total Factor Productivity (TFP) growth, which is decomposed into its major components of technological progress and technical efficiency within the framework of varying coefficients stochastic frontier analysis (VSFA) using Indonesia’s annual Large and Medium Manufacturing Industries Survey data over the period 2002–2014. The measurement of the components of TFP growth not only provides more insights and better understanding of the dynamic nature of the production processes, but also has important policy implications. The mean TFP growth during the period 2002-2014 was estimated to be 4.3 per cent and was mostly contributed by technological progress experienced by firms. The policy implication is that technical efficiency could still be improved for the selected technology to reap the full benefit of increasing output from the chosen technology.

In reality firms most often face negatively sloped demand curves. Then, for a given level of consumers’ surplus, levies on prices yield higher fiscal revenues than specific duties. Therefore, according to the prevailing view, the switch from unit to ad valorem taxation is supposed to generate more welfare; some even speak of an associated Pareto-improvement. However, this is not true because taxing prices merely transfers profits to the Treasury, while total rent remains unaffected. Since excise duties diminish the welfare gain in comparison with untaxed trade, an appropriately designed income tax allows all parties to benefit. Sales should be taxed only exceptionally.