Doit-on oublier la politique budgétaire ?

Creel, Jérôme; Ducoudré, Bruno; Mathieu, Catherine; Sterdyniak, Henri

doi:10.3917/reof.092.0043

Cited by 17 publications

(3 citation statements)

References 60 publications

(52 reference statements)

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“…European governments seem to be reluctant to adopt such a rule, despite it being applied in one of them -the UK -, but we have showed that the reasons for its rejection are generally not legitimate. Among these reasons, the textbook drawback associated with higher public expenditures -the crowding out effect -has already been argued to be weak theoretically (see Arestis and Sawyer, 2003;Creel et al, 2004); here, it is argued that empirically, this effect should not be overstated: it does not preclude higher economic growth and in many cases, it is not statistically significant. The null hypothesis assumes common unit root process.…”

Section: Resultsmentioning

confidence: 99%

Is Public Capital Productive in Europe?

Creel

Poilon

2006

SSRN Journal

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Section: Resultsmentioning

confidence: 99%

Is Public Capital Productive in Europe?

Creel

Poilon

2006

SSRN Journal

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“…However, the generality of these "non-Keynesian" effects of fiscal policy has been put into question. On the one hand, successful expansionary fiscal contractions have been coupled with other simultaneous events (such as a decrease in interest rates, a depreciation of the exchange rate, episodes of wage moderation, or a decrease in taxes on labour), which should preclude explaining the favourable economic evolution exclusively in terms of the restrictive fiscal policy; see, e.g., Creel et al (2005) or Perotti (2013). On the other hand, recent studies using a novel methodology (namely, identifying changes in fiscal policy motivated by the desire to reduce the budget deficit from historical documents) find that fiscal consolidations have a contractionary effect on economic activity, as expected from standard Keynesian models; see Romer and Romer (2010) and Guajardo et al (2011).…”

Section: Introductionmentioning

confidence: 99%

Alternative Strategies to Reduce Public Deficits: Taxes vs. Spending

Bajo‐Rubio

Gómez-Plana

2015

Journal of Applied Economics

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We examine the effects of several alternative measures intended to reduce government deficits for the case of Spain, distinguishing between those acting through taxes and through spending. The Spanish case is relevant as an example of front-loaded fiscal adjustment that has led to a large GDP fall, where (unlike the cases of Greece, Ireland and Portugal) the authorities were able to choose the composition of the adjustment measures. The empirical methodology is based on a computable general equilibrium model. All the simulated policies lead to a decrease in the levels of output and employment, and to a higher unemployment rate. The greatest contractionary effects appear in the case of an increase in the income tax, followed by spending cuts, especially in public education; in contrast, the contractionary effect is weaker for indirect tax increases. While income distribution for labour worsens with spending cuts, it slightly improves with tax increases.

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“…On the contrary, a cut in the level of public expenditures would have a positive impact on private demand, which would at least partially balance the negative effect of a fiscal retrenchment on activity. This thesis is thus part of the new anti-Keynesian view of public finances (see Creel and al., 2005). However, it does not seem to be confirmed by the data: in the United States, for example, the increase in the real interest rate, in 1980, precedes the public finances worsening whereas the low level of interest rates in the years [2002][2003][2004] goes with a high fiscal deficit.…”

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Fiscal Policy and Interest Rates

Ducoudré¹

2005

SSRN Journal

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Since the Seventies, increases in public debt and deficits have raised concern about their effects on interest rates. Growing public debt and persistent deficits would have led to inflation pressures, which would have forced central Banks to raise the short-term interest rate. Expectations of these pressures by financial markets would involve a rise in long-term interest rates and crowding-out effects. This paper studies the fiscal policy effects on interest rates from a theoretical and empirical point of view. Fiscal policy effects mainly depend on the full-employment hypothesis, the type of shocks affecting the economy, the type of fiscal policy, and agents' expectations about it. The estimated effects of fiscal policy variables in central Banks' reaction functions and long-term interest rate equations for the United States, the United Kingdom, Germany and Japan for the 1980-2003 period show that these effects are not mechanical and vary from one country to another. All in all, fiscal policies would not have entailed a generalized increase in real interest rates over that period.

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Doit-on oublier la politique budgétaire ?

Abstract: 4 juin 2004. Les auteurs remercient Francesco Saraceno qui a participé aux travaux ayant abouti à cet article.

Cited by 17 publications

References 60 publications

Is Public Capital Productive in Europe?

Is Public Capital Productive in Europe?

Alternative Strategies to Reduce Public Deficits: Taxes vs. Spending

Fiscal Policy and Interest Rates

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