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We offer a new design for automatic fiscal policy that can strengthen its role as a complement to counter-cyclical monetary policy, and analyse it in the Fair macroeconometric model that has been estimated using quarterly data for the US economy. Our automatic fiscal policy consists of the triggering of a transfer (or income tax rebate) whenever real GDP is at least X% below normal, the amount of the transfer varying with the size of the GDP gap. The size of the transfer is set with the sole purpose of effectively combating a recession. By contrast, the magnitudes of current automatic stabilizers are unintended by-products of setting the ratio of tax revenue to GDP, the degree of progressivity of the tax system and the level of unemployment benefits. We generate a severe recession using historical data and simulate the impact of our automatic fiscal policy. We assume that the Federal Reserve adheres to a counter-cyclical monetary policy governed by the interest rate (Taylor) rule estimated from historical data. We find that the interest rate rule alone mitigates the severe recession only modestly, whereas our automatic fiscal policy (together with the interest rate rule) substantially reduces the severity of the recession while generating only a relatively small rise in the government debt/GDP ratio.

TX 75083-3836, U.S.A., fax 01-972-952-9435. AbstractPlacing a maximum reservoir contact well in a thinly layered reservoir has always been a challenge. Experiences showed that the well trajectory could easily be steered out of the target, necessitating expensive plug-back and redrilling operations to ensure that the well is drilled as planned. With the deployment of advanced LWD technologies, such as density image (DI), resistivity image (RI) and directional deep resistivity (DDR) logging tools, and high speed real time satellite data transmission, well paths can be geosteered from anywhere and kept in a thinly layered reservoir.The first Saudi Aramco field examples of utilizing RI and DDR are shown to demonstrate the added values of new technologies in geosteering difficult-to-drill wells. In some of the examples, images of density and resistivity are consistent and all could be used for geosteering. In other examples, wrong geosteering decisions would have been made had the DI been the only available tool. With the help of RI, reservoir contact of multi-lateral wells is increased. Examples also show that using DDR can prevent the well trajectory from being too close to the zero porosity rock layer or the underlying water.