Balance sheet changes and the impact of financial sector risk-taking on fiscal multipliers

Makrelov, Konstantin; Arndt, Channing; Davies, Rob; Harris, Laurence

doi:10.1016/j.econmod.2019.08.006

Cited by 12 publications

(20 citation statements)

References 49 publications

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“…Despite representing a significant advancement in macroeconomic theory, one limitation of DSGE models with financial frictions is the lack of a proper representation of the financial sector in the fiscal policy transmission dynamics. In order to allow for disaggregated balance sheet effects of fiscal actions, Makrelov at al. (2020) propose a richer representation of financial dynamics in a stock-and-flow consistent (SFC) model including various instruments and agents.…”

Section: Financial Market Dynamics and The Fiscal Multipliermentioning

confidence: 99%

“…Lamentably, extant research presents mixed views on the effectiveness of fiscal policy, whereby the size of the multipliers depends on a number of conjunctural aspects such as the responsiveness of interest rates, the health of public finances, and the state of the business cycle (Perotti 1999;Christiano et al 2011;Corsetti et al 2012). More recently, the New Keynesian literature has shifted attention to the agency of financial markets in the fiscal policy transmission mechanism (Fernández-Villaverde 2010;Makrelov at al. 2020).…”

Section: Introductionmentioning

confidence: 99%

“…2020). In particular, Makrelov at al. (2020) explore how government expenditure shocks can prompt a financial accelerator mechanism that has the ability to amplify the initial demand shock through changes in asset valuations and the external finance premium faced by firms.…”

Section: Introductionmentioning

confidence: 99%

“…The following section presents a selected survey of the literature on fiscal policy that highlights the most recent and influential academic developments. Given the scope of this paper, Section 2 will also introduce the links between fiscal policy and financial markets with a focus on the balance sheet effects modelled by Makrelov et al (2020). Section 3 summarizes the modest body of studies that advance estimates of fiscal multipliers in South Africa.…”

Section: Introductionmentioning

confidence: 99%

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State-dependent fiscal multipliers and financial dynamics: An impulse response analysis by local projections for South Africa

Merrino¹

2021

WIDER Working Paper

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Typescript prepared by Siméon Rapin.United Nations University World Institute for Development Economics Research provides economic analysis and policy advice with the aim of promoting sustainable and equitable development. The Institute began operations in 1985 in Helsinki, Finland, as the first research and training centre of the United Nations University. Today it is a unique blend of think tank, research institute, and UN agency-providing a range of services from policy advice to governments as well as freely available original research.The Institute is funded through income from an endowment fund with additional contributions to its work programme from Finland, Sweden, and the United Kingdom as well as earmarked contributions for specific projects from a variety of donors.

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Section: Financial Market Dynamics and The Fiscal Multipliermentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

State-dependent fiscal multipliers and financial dynamics: An impulse response analysis by local projections for South Africa

Merrino¹

2021

WIDER Working Paper

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“…This need exists in industry and agriculture, which often due to low labor productivity and technological backwardness feel the need for financial support from the state. With an increase in government spending to support small and medium-sized enterprises, an increase in aggregate demand in the economy is ensured [ 13 ]. And the point is not so much in budget financing, but in off-budget investments, subsidies, subventions, loans.…”

Section: Introductionmentioning

confidence: 99%

State Support of the Real Sector of the Economy: Legal Regulation

Fadeev

2020

Engineering Economics: Decisions and Solutions From Eurasian Perspective

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The problem of state support for business is the most important in today’s conditions. The cataclysms that have occurred recently have affected the world economy. The world has ceased to be balanced. Business froze in fear of inevitable bankruptcy, unemployment and ruin. Political changes in Russia, which began in January 2020, the drop in oil prices, the collapse of the ruble, which followed the relative stability of the Russian national currency and reached the pandemic country, negatively affected business in the country. The development of urgent state measures to support small and medium-sized enterprises is the only way to maintain its viability. These measures should be based on a clear regulatory framework that does not allow vague interpretations and legal incidents. Using the comparative legal method, it is necessary to draw the experience of those countries in which there is a state policy in relation to small and medium-sized businesses, which is a system of socio-economic actions built on the principle of ensuring the favorable development of this sector of the economy and to develop measures that can preserve it in conditions of prevailing force majeure. The aim of this work is a comparative analysis of measures taken by the world community and Russia to support small and medium-sized businesses during the economic crisis caused by Covid19. Particular attention is paid to the legislative justification of measures taken in Russia and the identification of shortcomings of the newly adopted normative legal acts.

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The impact of capital flow reversal shocks in South Africa: a stock- and-flow-consistent analysis

Makrelov

Davies

Harris

2021

International Review of Applied Economics

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Balance sheet changes and the impact of financial sector risk-taking on fiscal multipliers

Cited by 12 publications

References 49 publications

State-dependent fiscal multipliers and financial dynamics: An impulse response analysis by local projections for South Africa

State-dependent fiscal multipliers and financial dynamics: An impulse response analysis by local projections for South Africa

State Support of the Real Sector of the Economy: Legal Regulation

The impact of capital flow reversal shocks in South Africa: a stock- and-flow-consistent analysis

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