Economics, Econometrics and Finance › Economics and Econometrics

Fiscal Policies and Political Economy

Works Count: 40560

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This cluster of papers explores the political and economic impacts of fiscal policy cycles, including topics such as political budget cycles, public debt, economic growth, procyclical fiscal policy, government debt, fiscal rules, election effects on fiscal policy, and local government finance.

Keywords

Fiscal Policy; Political Budget Cycles; Public Debt; Economic Growth; Procyclical Fiscal Policy; Government Debt; Political Economy; Fiscal Rules; Election Effects; Local Government Finance

Political Economics: Explaining Economic Policy

2002-01-01

Sam Bucovetsky , Torsten Persson , Guido Tabellini

What determines the size and form of redistributive programs, the extent and type of public goods provision, the burden of taxation across alternative tax bases, the size of government deficits, … What determines the size and form of redistributive programs, the extent and type of public goods provision, the burden of taxation across alternative tax bases, the size of government deficits, and the stance of monetary policy during the course of business and electoral cycles? A large and rapidly growing literature in political economics attempts to answer these questions. But so far there is little consensus on the answers and disagreement on the appropriate mode of analysis. Combining the best of three separate traditions -- the theory of macroeconomic policy, public choice, and rational choice in political science -- Torsten Persson and Guido Tabellini suggest a unified approach to the field. As in modern macroeconomics, individual citizens behave rationally, their preferences over economic outcomes inducing preferences over policy. As in public choice, the delegation of policy decisions to elected representatives may give rise to agency problems between voters and politicians. And, as in rational choice, political institutions shape the procedures for setting policy and electing politicians. The authors outline a common method of analysis, establish several new results, and identify the main outstanding problems.

Political budget cycles: Do they differ across countries and why?

2006-05-05

Min Shi , Jakob Svensson

Why a Stubborn Conservative would Run a Deficit: Policy with Time- Inconsistent Preferences

1989-05-01

Torsten Persson , Lars E.O. Svensson

Journal Article Why a Stubborn Conservative would Run a Deficit: Policy with Time-Inconsistent Preferences Get access Torsten Persson, Torsten Persson Institute for International Economic Studies, University of Stockholm Search for … Journal Article Why a Stubborn Conservative would Run a Deficit: Policy with Time-Inconsistent Preferences Get access Torsten Persson, Torsten Persson Institute for International Economic Studies, University of Stockholm Search for other works by this author on: Oxford Academic Google Scholar Lars E. O. Svensson Lars E. O. Svensson Institute for International Economic Studies, University of Stockholm Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 104, Issue 2, May 1989, Pages 325–345, https://doi.org/10.2307/2937850 Published: 01 May 1989

NBER macroeconomics annual 1987

1989-03-01

Olivier Blanchard , Stanley Fischer

The Expansion of the Public Economy: A Comparative Analysis

1978-12-01

David Cameron

In spite of the traditional legitimacy accorded the market mechanism of the private sector in advanced capitalist nations, governments in those nations have become more influential as providers of social … In spite of the traditional legitimacy accorded the market mechanism of the private sector in advanced capitalist nations, governments in those nations have become more influential as providers of social services and income supplements, producers of goods, managers of the economy, and investors of capital. And in order to finance these various activities the revenues of public authorities have increased dramatically–to a point where they are now equivalent to one-third to one-half of a nation's economic product. This growth in governmental activity in advanced capitalist society is examined by considering the causes, and some of the consequences, of the expansion of the public economy–defined, following Schumpeter's discussion of the “tax state,” in terms of the extractive role of government. The primary concern of this article is to discover why some nations have experienced a far greater rate of increase in recent years and, as a result, have a much larger public economy than other nations. Five types of explanation are elaborated to account for the growth of the scope of governmental activity: (1) the level and rate of growth in the economic product; (2) the degree to which the fiscal structure of a nation relies on indirect, or “invisible,” taxes; (3) politics–in particular the partisan composition of government and the frequency of electoral competition; (4) the institutional structure of government; and (5) the degree of exposure of the economy to the international marketplace. The article evaluates the five explanations with data for 18 nations, and concludes by discussing some implications of the analysis.

Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence

1993-05-01

Alberto Alesina , Lawrence H. Summers

This note uses information on a sample of sixteen OECD countries to assess the relationship between central bank independence and macroeconomic performance. As previous work suggests, politically controlled central banks … This note uses information on a sample of sixteen OECD countries to assess the relationship between central bank independence and macroeconomic performance. As previous work suggests, politically controlled central banks are more likely to pursue policies that lead to high and variable inflation. However, the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth, unemployment, or the ex ante real interest rate. Copyright 1993 by Ohio State University Press.

The Behavior of U. S. Public Debt and Deficits

1998-08-01

Henning Bohn

Journal Article The Behavior of U. S. Public Debt and Deficits Get access Henning Bohn Henning Bohn University of California at Santa Barbara Search for other works by this author … Journal Article The Behavior of U. S. Public Debt and Deficits Get access Henning Bohn Henning Bohn University of California at Santa Barbara Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 113, Issue 3, August 1998, Pages 949–963, https://doi.org/10.1162/003355398555793 Published: 01 August 1998

Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty: Comment

2004-05-01

Antonio Ciccone

Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty: Comment by Antonio Ciccone. Published in volume 94, issue 3, pages 785-795 of American Economic Review, June 2004 Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty: Comment by Antonio Ciccone. Published in volume 94, issue 3, pages 785-795 of American Economic Review, June 2004

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NBER Macroeconomics Annual 1997

1997-01-01

Ben Bernanke , Julio J. Rotemberg

The goals of the annual NBER Macroeconomics Conference are to present, extend, and apply frontier work in macroeconomics and to stimulate work by macroeconomists in policy issues. Each paper in … The goals of the annual NBER Macroeconomics Conference are to present, extend, and apply frontier work in macroeconomics and to stimulate work by macroeconomists in policy issues. Each paper in the Annual is followed by comments and discussion.

What To Do (and Not to Do) with Time-Series Cross-Section Data

1995-09-01

Nathaniel Beck , Jonathan N. Katz

We examine some issues in the estimation of time-series cross-section models, calling into question the conclusions of many published studies, particularly in the field of comparative political economy. We show … We examine some issues in the estimation of time-series cross-section models, calling into question the conclusions of many published studies, particularly in the field of comparative political economy. We show that the generalized least squares approach of Parks produces standard errors that lead to extreme overconfidence, often underestimating variability by 50% or more. We also provide an alternative estimator of the standard errors that is correct when the error structures show complications found in this type of model. Monte Carlo analysis shows that these “panel-corrected standard errors” perform well. The utility of our approach is demonstrated via a reanalysis of one “social democratic corporatist” model.

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The Political Business Cycle

1975-04-01

William D. Nordhaus

Journal Article The Political Business Cycle Get access William D. Nordhaus William D. Nordhaus Yale University Search for other works by this author on: Oxford Academic Google Scholar The Review … Journal Article The Political Business Cycle Get access William D. Nordhaus William D. Nordhaus Yale University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 42, Issue 2, April 1975, Pages 169–190, https://doi.org/10.2307/2296528 Published: 01 April 1975

Political and Monetary Institutions and Public Financial Policies in the Industrial Countries

1991-10-01

Vittorio Grilli , Donato Masciandaro , Guido Tabellini +2 more

Institutions and policies Vittorio Grilli, Donato Masciandaro and Guido Tabellini Why do countries as similar as the industrialized OECD countries go through such different experience in terms of public deficits … Institutions and policies Vittorio Grilli, Donato Masciandaro and Guido Tabellini Why do countries as similar as the industrialized OECD countries go through such different experience in terms of public deficits and debts or in terms of inflation? The answer cannot come from macroeconomic policy responses to different disturbances, nor from the principles of optimal taxation, but rather from politics. This article focuses on the role that particular institutions exert in providing constraints and incentives which shape the actions of policymakers. The electoral process and political traditions affect the ability of governments to deal with deficits and mounting debts. What seems to matter most, it is found, is the effect of the durability of governments. Governments with short horizons act myopically and never quite tackle the hard choices. Such governments typically exist in countries with an electoral system favouring many small political parties. Central bank independence promotes low inflation with no apparent costs in terms of real economic performance, irrespective of the political institutions. In fact there is no link between monetary and fiscal discipline. These findings carry powerful implications for countries facing high indebtedness or stubborn inflation, but also for the construction of the European Economic and Monetary Union.

Elections and Macroeconomic Policy Cycles

1988-01-01

Kenneth Rogoff , Anne Sibert

Journal Article Elections and Macroeconomic Policy Cycles Get access Kenneth Rogoff, Kenneth Rogoff University of Wisconsin Search for other works by this author on: Oxford Academic Google Scholar Anne Sibert … Journal Article Elections and Macroeconomic Policy Cycles Get access Kenneth Rogoff, Kenneth Rogoff University of Wisconsin Search for other works by this author on: Oxford Academic Google Scholar Anne Sibert Anne Sibert University of Kansas Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 55, Issue 1, January 1988, Pages 1–16, https://doi.org/10.2307/2297526 Published: 01 January 1988 Article history Received: 01 January 1987 Accepted: 01 August 1987 Published: 01 January 1988

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Fiscal Policy in Good Times and Bad

1999-11-01

Roberto Perotti

In the 1980s several countries with large government debt or deficit implemented substantial, and in some cases drastic, deficit cuts. Contrary to widespread expectations, in many cases private consumption boomed … In the 1980s several countries with large government debt or deficit implemented substantial, and in some cases drastic, deficit cuts. Contrary to widespread expectations, in many cases private consumption boomed rather than contracted. This paper shows that in times of "fiscal stress" shocks to government revenues and, especially, expenditure have very different effects on private consumption than in "normal" times.

Does high public debt consistently stifle economic growth? A critique of Reinhart and Rogoff

2013-12-24

Thomas Herndon , Ash Michael , Robert Pollin

We replicate Reinhart and Rogoff (2010A and 2010B) and find that selective exclusion of available data, coding errors and inappropriate weighting of summary statistics lead to serious miscalculations that inaccurately … We replicate Reinhart and Rogoff (2010A and 2010B) and find that selective exclusion of available data, coding errors and inappropriate weighting of summary statistics lead to serious miscalculations that inaccurately represent the relationship between public debt and GDP growth among 20 advanced economies. Over 1946–2009, countries with public debt/GDP ratios above 90% averaged 2.2% real annual GDP growth, not −0.1% as published. The published results for (i) median GDP growth rates for the 1946–2009 period and (ii) mean and median GDP growth figures over 1790–2009 are all distorted by similar methodological errors, although the magnitudes of the distortions are somewhat smaller than with the mean figures for 1946–2009. Contrary to Reinhart and Rogoff’s broader contentions, both mean and median GDP growth when public debt levels exceed 90% of GDP are not dramatically different from when the public debt/GDP ratios are lower. The relationship between public debt and GDP growth varies significantly by period and country. Our overall evidence refutes RR’s claim that public debt/GDP ratios above 90% consistently reduce a country’s GDP growth.

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The Correlates of Change in International Financial Regulation

1997-09-01

Dennis P. Quinn

With which political and economic variables is change in international financial regulation robustly associated? I undertook multivariate regression analysis of this question using a quantitative measure of the regulation of … With which political and economic variables is change in international financial regulation robustly associated? I undertook multivariate regression analysis of this question using a quantitative measure of the regulation of international financial transactions. The measure was created by coding the laws of 64 nations. The associations between change in international financial regulation and measures of long-run economic growth, corporate taxation, government expenditures, and income inequality are estimated, using the models, methods, and data of Batro (1991), Deininger and Squire (1996a), Leamer (1983, 1985), and Levine and Renelt (1992). The findings point to a new agenda for research on international financial regulation.

State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics

1994-08-01

James M. Poterba

This paper explores the dynamics of state taxes and spending during the late 1980s, when regional economic downturns and increased expenditure demands led to substantial state budget deficits. More restrictive … This paper explores the dynamics of state taxes and spending during the late 1980s, when regional economic downturns and increased expenditure demands led to substantial state budget deficits. More restrictive state fiscal institutions, such as "no-deficit-carryover" rules and tax and expenditure limitations, are correlated with more rapid fiscal adjustment to unexpected deficits. Political factors are also important. When a single party controls the state house and the governorship, deficit adjustment is much faster than when party control is divided. In gubernatorial election years, tax increases and spending cuts are both significantly smaller than at other times.

Suggestions for a New Set of Fiscal Indicators

1990-04-01

Olivier Blanchard

There are four sets of questions that fiscal indicators can help answer: (1) Of the changes in the fiscal position, what part is due to changes in the economic environment … There are four sets of questions that fiscal indicators can help answer: (1) Of the changes in the fiscal position, what part is due to changes in the economic environment and what part is due to policy? (2) Can the current course of fiscal policy be sustained, or will the government have to adjust taxes or spending? (3) What is the effect of fiscal policy on activity, through its effects on relative prices, be it the price of labour or the price of capital? (4) What is the macroeconomic impact of fiscal policy, through deficit and debt finance?This paper is one of three in this Working Paper Series, along with those by Chouraqui et al. and Gramlich, in which the assessment of fiscal policy is reconsidered. It argues that no single indicator can give even rough answers to all those questions. It then develops four (sets of) indicators, aimed at answering each of the questions ...

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New Tools in Comparative Political Economy: The Database of Political Institutions

2001-06-01

Thorsten Beck , George R. G. Clarke , Alberto Groff +2 more

This article introduces a large new cross‐country database, the Database of Political Institutions. It covers 177 countries over 21 years, 1975–95. The article presents the intuition, construction, and definitions of … This article introduces a large new cross‐country database, the Database of Political Institutions. It covers 177 countries over 21 years, 1975–95. The article presents the intuition, construction, and definitions of the different variables. Among the novel variables introduced are several measures of checks and balances, tenure and stability, identification of party affiliation with government or opposition, and fragmentation of opposition and government parties in the legislature.

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Divided Government, Fiscal Institutions, and Budget Deficits: Evidence from the States

1994-12-01

James Ε. Alt , Robert C. Lowry

Does partisan control of American state government have systematic effects on state spending and taxing levels? Does divided control affect the government's ability to make hard decisions? Do institutional rules … Does partisan control of American state government have systematic effects on state spending and taxing levels? Does divided control affect the government's ability to make hard decisions? Do institutional rules like legal deficit carryover restrictions matter? Using a formal model of fiscal policy to guide empirical analysis of data covering the American states from 1968 to 1987, we conclude that (1) aggregate state budget totals are driven by different factors under Democrats and Republicans, the net result being that Democrats target spending (and taxes) to higher shares of state-level personal income; (2) divided government is less able to react to revenue shocks that lead to budget deficits, particularly where different parties control each chamber of the legislature; and (3) unified party governments with restricted ability to carry deficits into the next fiscal year (outside the South) have sharper reactions to negative revenue shocks than those without restrictions.

Fiscal Expansions and Adjustments in OECD Countries

1995-10-01

Alberto Alesina , Roberto Perotti , Francesco Giavazzi +1 more

Journal Article Fiscal expansions and adjustments in OECD countries Get access Alberto Alesina, Alberto Alesina Harvard University, NBER and CEPR; Columbia University Search for other works by this author on: … Journal Article Fiscal expansions and adjustments in OECD countries Get access Alberto Alesina, Alberto Alesina Harvard University, NBER and CEPR; Columbia University Search for other works by this author on: Oxford Academic Google Scholar Roberto Perotti Roberto Perotti Harvard University, NBER and CEPR; Columbia University Search for other works by this author on: Oxford Academic Google Scholar Economic Policy, Volume 10, Issue 21, 1 October 1995, Pages 205–248, https://doi.org/10.2307/1344590 Published: 21 July 2014

The Principle of "Fiscal Equivalence": The Division of Responsibilities among Different Levels of Government

1969-01-01

Olson Mancur

Winners Take All: The Politics of Partial Reform in Postcommunist Transitions

1998-01-01

Joel S. Hellman

Conventional models of the politics of economic reform tend to be based on an assumption about the costs and benefits of reform, known informally as the J-curve. Reforms are expected … Conventional models of the politics of economic reform tend to be based on an assumption about the costs and benefits of reform, known informally as the J-curve. Reforms are expected to make things worse before they get better. This presents a classic time inconsistency dilemma for reformist governments forced to demand severe sacrifices from the public in the short term for the mere promise of future gains. In response, political economy models of the reform process have tended to stress the importance of insulating governments from the pressures of the short-term losers until a sufficient constituency of winners has been created with a stake in supporting and enhancing the reforms. Based on evidence from the postcommunist transitions, this article suggests that the most serious political obstacles to the process of economic reform have come not from the short-term losers but from the shortterm winners. Groups that gain substantial rents from the early distortions of a partially reformed economy have a stake in maintaining a partial reform equilibrium that generates high private gains, but at a considerable social cost. In these countries, the main political challenge has been, not to marginalize the losers, but to restrain the winners. This explains the paradoxical outcome of the postcommunist transitions: that political systems which are more inclusive of the losers have been able to adopt and sustain more comprehensive economic reforms than states insulated from popular pressures.

Myopic Voters and Natural Disaster Policy

2009-08-01

Andrew Healy , Neil Malhotra

Do voters effectively hold elected officials accountable for policy decisions? Using data on natural disasters, government spending, and election returns, we show that voters reward the incumbent presidential party for … Do voters effectively hold elected officials accountable for policy decisions? Using data on natural disasters, government spending, and election returns, we show that voters reward the incumbent presidential party for delivering disaster relief spending, but not for investing in disaster preparedness spending. These inconsistencies distort the incentives of public officials, leading the government to underinvest in disaster preparedness, thereby causing substantial public welfare losses. We estimate that $1 spent on preparedness is worth about $15 in terms of the future damage it mitigates. By estimating both the determinants of policy decisions and the consequences of those policies, we provide more complete evidence about citizen competence and government accountability.

Dynamic Fiscal Policy.

1989-02-01

Michael Keen , Alan J. Auerbach , Laurence J. Kotlikoff

A Positive Theory of Fiscal Deficits and Government Debt

1990-07-01

Alberto Alesina , Guido Tabellini

Journal Article A Positive Theory of Fiscal Deficits and Government Debt Get access Alberto Alesina, Alberto Alesina Harvard University, NBER and CEPR Search for other works by this author on: … Journal Article A Positive Theory of Fiscal Deficits and Government Debt Get access Alberto Alesina, Alberto Alesina Harvard University, NBER and CEPR Search for other works by this author on: Oxford Academic Google Scholar Guido Tabellini Guido Tabellini University of California, Los Angeles, NBER and CEPR Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 57, Issue 3, July 1990, Pages 403–414, https://doi.org/10.2307/2298021 Published: 01 July 1990 Article history Received: 01 December 1988 Accepted: 01 September 1989 Published: 01 July 1990

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Why Is Fiscal Policy Often Procyclical?

2008-07-31

Alberto Alesina , Filipe R. Campante , Guido Tabellini

Journal Article Why is Fiscal Policy Often Procyclical? Get access Alberto Alesina, Alberto Alesina 1Harvard University Search for other works by this author on: Oxford Academic Google Scholar Filipe R. … Journal Article Why is Fiscal Policy Often Procyclical? Get access Alberto Alesina, Alberto Alesina 1Harvard University Search for other works by this author on: Oxford Academic Google Scholar Filipe R. Campante, Filipe R. Campante 2John F. Kennedy School of Government, Harvard University Search for other works by this author on: Oxford Academic Google Scholar Guido Tabellini Guido Tabellini 3IGIER Bocconi Search for other works by this author on: Oxford Academic Google Scholar Journal of the European Economic Association, Volume 6, Issue 5, 1 September 2008, Pages 1006–1036, https://doi.org/10.1162/JEEA.2008.6.5.1006 Published: 01 September 2008

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Electoral Systems and Public Spending

2002-05-01

Gian Maria Milesi-Ferretti , Roberto Perotti , Massimo Rostagno

Journal Article Electoral Systems and Public Spending Get access Gian Maria Milesi-Ferretti, Gian Maria Milesi-Ferretti International Monetary Fund and Centre for Economic Policy Research Search for other works by this … Journal Article Electoral Systems and Public Spending Get access Gian Maria Milesi-Ferretti, Gian Maria Milesi-Ferretti International Monetary Fund and Centre for Economic Policy Research Search for other works by this author on: Oxford Academic Google Scholar Roberto Perotti, Roberto Perotti European University Institute and Centre for Economic Policy Research Search for other works by this author on: Oxford Academic Google Scholar Massimo Rostagno Massimo Rostagno European Central Bank Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 117, Issue 2, May 2002, Pages 609–657, https://doi.org/10.1162/003355302753650346 Published: 01 May 2002

Estimating Incumbency Advantage without Bias

1990-11-01

Andrew Gelman , Gary King

In this paper we prove theoretically and demonstrate empirically that all existing measures of incumbency advantage in the congressional elections literature are biased or inconsistent.We then provide an unbiased estimator … In this paper we prove theoretically and demonstrate empirically that all existing measures of incumbency advantage in the congressional elections literature are biased or inconsistent.We then provide an unbiased estimator based on a very simple linear regression model.We apply this new method to congressional elections since 1900, providing the first evidence of a positive incumbency advantage in the first half of the century.

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Fiscal policy and monetary integration in Europe

2003-10-01

Jordi Galı́ , Roberto Perotti

Journal Article Fiscal policy and monetary integration in Europe Get access Jordi Galí, Jordi Galí 1CREI, Universitat Pompeu Fabra and CEPR; European University Institute and CEPR Search for other works … Journal Article Fiscal policy and monetary integration in Europe Get access Jordi Galí, Jordi Galí 1CREI, Universitat Pompeu Fabra and CEPR; European University Institute and CEPR Search for other works by this author on: Oxford Academic Google Scholar Roberto Perotti Roberto Perotti 1CREI, Universitat Pompeu Fabra and CEPR; European University Institute and CEPR Search for other works by this author on: Oxford Academic Google Scholar Economic Policy, Volume 18, Issue 37, 1 October 2003, Pages 533–572, https://doi.org/10.1111/1468-0327.00115_1 Published: 26 July 2014

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Political and economic determinants of budget deficits in the industrial democracies

1989-05-01

Nouriel Roubini , Jeffrey D. Sachs

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Equilibrium Political Budget Cycles

1987-11-01

Kenneth Rogoff

Prior to elections, governments (at all levels) frequently undertake a consumption binge.Taxes are cut, transfers are raised, and government spending is distorted towards highly visible items.The "political business cycle" (better … Prior to elections, governments (at all levels) frequently undertake a consumption binge.Taxes are cut, transfers are raised, and government spending is distorted towards highly visible items.The "political business cycle" (better be thought of as "the political budget cycle") has been intensively examined, at least for the case of national elections.A number of proposals have been advanced for mitigating electoral cycles in fiscal policy.The present paper is the first effort to provide a fully-specified equilibrium framework for analyzing such proposals.A political budget cycle arises here via a multidimensional signalling process, in which incumbent leaders try to convince voters that they have recently been doing an excellent job in administering the government.Efforts to mitigate the cycle can easily prove counterproductive, either by impeding the transmission of inf ormation or by inducing politicians to select more costly ways of signalling.The model also indicates new directions for empirical research.

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Debt, Deficits, and Finite Horizons

1985-04-01

Olivier Blanchard

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Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits

1995-08-01

Tim Besley , Anne Case

Journal Article Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits Get access Timothy Besley, Timothy Besley London School of Economics and NBER Search for other works … Journal Article Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits Get access Timothy Besley, Timothy Besley London School of Economics and NBER Search for other works by this author on: Oxford Academic Google Scholar Anne Case Anne Case Princeton University and NBER Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 110, Issue 3, August 1995, Pages 769–798, https://doi.org/10.2307/2946699 Published: 01 August 1995

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Growth in a Time of Debt

2010-05-01

Carmen Reinhart , Kenneth Rogoff

We study economic growth and inflation at different levels of government and external debt. Our analysis is based on new data on forty-four countries spanning about two hundred years. The … We study economic growth and inflation at different levels of government and external debt. Our analysis is based on new data on forty-four countries spanning about two hundred years. The dataset incorporates over 3,700 annual observations covering a wide range of political systems, institutions, exchange rate arrangements, and historic circumstances. Our main findings are: First, the relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more. We find that the threshold for public debt is similar in advanced and emerging economies. Second, emerging markets face lower thresholds for external debt (public and private)--which is usually denominated in a foreign currency. When external debt reaches 60 percent of GDP, annual growth declines by about two percent; for higher levels, growth rates are roughly cut in half. Third, there is no apparent contemporaneous link between inflation and public debt levels for the advanced countries as a group (some countries, such as the United States, have experienced higher inflation when debt/GDP is high.) The story is entirely different for emerging markets, where inflation rises sharply as debt increases.

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Fiscal Requirements for Price Stability

2001-08-01

Michael Woodford

This paper argues that maintaining price stability requires not only commitment to an appropriate monetary policy rule, but an appropriate fiscal policy rule as well. 'Ricardian equivalence' does not imply … This paper argues that maintaining price stability requires not only commitment to an appropriate monetary policy rule, but an appropriate fiscal policy rule as well. 'Ricardian equivalence' does not imply that fiscal policy is irrelevant, except in the case of a certain class of policies (called 'Ricardian' policies). The role of fiscal developments in inflation determination under a non-Ricardian regime is illustrated through an analysis of the U.S. bond-price support regime of the 1940s. Several recent theoretical challenges to the logical possibility of a non-Ricardian regime are addressed, and a number of consequences are then drawn for the choice of policies to ensure price stability. An example of a monetary-fiscal regime with attractive properties would combine a 'Taylor rule' for monetary policy with nominal-deficit targeting as a fiscal policy commitment.

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Comparative Politics and Public Finance

2000-12-01

Torsten Persson , Gérard Roland , Guido Tabellini

We propose a model with micropolitical foundations to contrast different political regimes. Compared to a parliamentary regime, the institutions of a presidential‐congressional regime produce fewer incentives for legislative cohesion but … We propose a model with micropolitical foundations to contrast different political regimes. Compared to a parliamentary regime, the institutions of a presidential‐congressional regime produce fewer incentives for legislative cohesion but more separation of powers. These differences are reflected in the size and composition of government spending. A parliamentary regime has redistribution toward a majority, less underprovision of public goods, and more rents to politicians; a presidential‐congressional regime has redistribution toward powerful minorities, more underprovision of public goods, but less rents to politicians. The size of government is smaller under a presidential regime. This last prediction is consistent with cross‐country data.

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Political budget cycles in new versus established democracies

2005-10-01

Adi Brender , Allan Drazen

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Diagrammatic Exposition of a Theory of Public Expenditure

1955-11-01

Paul A. Samuelson

Political Parties and Macroeconomic Policy

1977-12-01

Douglas A. Hibbs

This study examines postwar patterns in macroeconomic policies and outcomes associated with left-and right-wing governments in capitalist democracies. It argues that the objective economic interests as well as the subjective … This study examines postwar patterns in macroeconomic policies and outcomes associated with left-and right-wing governments in capitalist democracies. It argues that the objective economic interests as well as the subjective preferences of lower income and occupational status groups are best served by a relatively low unemployment-high inflation macroeconomic configuration, whereas a comparatively high unemployment-low inflation configuration is compatible with the interests and preferences of upper income and occupational status groups. Highly aggregated data on unemployment and inflation outcomes in relation to the political orientation of governments in 12 West European and North American nations are analyzed revealing a low unemployment-high inflation configuration in nations regularly governed by the Left and a high unemployment-low inflation pattern in political systems dominated by center and rightist parties. Finally, time-series analyses of quarterly postwar unemployment data for the United States and Great Britain suggests that the unemployment rate has been driven downward by Democratic and Labour administrations and upward by Republican and Conservative governments. The general conclusion is that governments pursue macroeconomic policies broadly in accordance with the objective economic interests and subjective preferences of their class-defined core political constituencies.

Insiders and Outsiders: The Choice between Informed and Arm's-Length Debt

1992-09-01

Raghuram G. Rajan

Lectures on Macroeconomics.

1990-03-01

David Gowland , Olivier Blanchard , Stanley Fischer

Journal Article Lectures on Macroeconomics Get access Lectures on Macroeconomics. By OLIVIER JEAN BLANCHARD and STANLEY FISCHER. (Cambridge, Mass. and London: MIT Press, 1989. Pp. xiii + 650. £24.75 hardback. … Journal Article Lectures on Macroeconomics Get access Lectures on Macroeconomics. By OLIVIER JEAN BLANCHARD and STANLEY FISCHER. (Cambridge, Mass. and London: MIT Press, 1989. Pp. xiii + 650. £24.75 hardback. ISBN 0 262 02283 4.) David Gowland David Gowland University of York Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 100, Issue 399, 1 March 1990, Pages 252–254, https://doi.org/10.2307/2233612 Published: 01 March 1990

Lectures on Macroeconomics.

1990-05-01

John Driffill , O. J. Blanchard , S. Fischer

The Economics of the Public Sector

1999-01-01

Sara Connolly , Alistair Munro

Understanding the Normalization of the Japanese Economy

2025-06-24

Takatoshi Ito | Asian Economic Policy Review

ABSTRACT This paper focuses on three aspects of the Japanese economy that deviated from “normalcy”—unconventional monetary policy, unsustainable fiscal policy, and declining growth and productivity. Non‐normality in Japan has developed … ABSTRACT This paper focuses on three aspects of the Japanese economy that deviated from “normalcy”—unconventional monetary policy, unsustainable fiscal policy, and declining growth and productivity. Non‐normality in Japan has developed over the past few decades, but has become more prominent during the Abenomics years starting in 2013. Regaining normalcy in monetary policy requires a gradual increase in the policy interest rate to the neutral interest rate, achieving a 2% inflation rate, and reducing the Bank of Japan's balance sheet by quantitative tightening. Regaining normalcy in fiscal policy requires reducing government fiscal deficits, which tend to ratchet up as the country experiences a crisis. This fiscal tightening has to be done in an environment where monetary normalization proceeds. Japan's per capita GDP relative to other countries has declined over the last three decades. Japan's per capita GDP relative to that of the US in 2025 is about that of 1980. Similarly, the yen's purchasing power in 2025 is similar to what it was in the early 1970s. Japan has become poorer since the mid‐1990s. To prevent Japan from further sliding back into the emerging market group, the government has to promote research and development in high‐value‐added technologies.

Mali Stresin Bir Göstergesi Olarak Bütçe Stresi: Türkiye’de Eğilimler ve Belirleyiciler

2025-06-24

Berat Kara | Karadeniz Sosyal Bilimler Dergisi

Mali stres, bir hükümetin bütçesel hedeflerine ulaşma kapasitesini ve kamu hizmetlerini sağlamak için gerekli kaynakları elde etme yeteneğini olumsuz etkileyen bir durumdur. Bütçe stresi ise, gelir ve harcamalar arasındaki dengesizlikten … Mali stres, bir hükümetin bütçesel hedeflerine ulaşma kapasitesini ve kamu hizmetlerini sağlamak için gerekli kaynakları elde etme yeteneğini olumsuz etkileyen bir durumdur. Bütçe stresi ise, gelir ve harcamalar arasındaki dengesizlikten kaynaklanan bir baskıdır. Bu çalışma, Türkiye’de mali stresi Arnett (2011) ile Boukari ve Veiga (2018) tarafından geliştirilen bütçe stresi göstergesi kullanarak incelemektedir. 1984-2023 dönemi için yıllık bütçe stresi hesaplanmış ve koalisyon hükümetleri, seçim dönemleri, ekonomik krizler ve ek bütçe uygulamaları gibi özel dönemlerdeki değişimi analiz edilmiştir. Sonuçlar, bütçe stresinin özellikle koalisyon hükümetleri ve ek bütçe çıkarılan yıllarda yüksek olduğunu, ancak kriz ve seçim dönemlerinin sınırlı bir etkisi olduğunu göstermektedir. Çalışmanın ikinci aşamasında, 2005-2024 dönemi aylık verileri kullanılarak, mali stresi etkileyen makroekonomik faktörler Prais-Winsten regresyon analiziyle incelenmiştir. Bulgular, işsizlik oranı ve döviz kurunun mali stresi artırdığını; cari açık ve ithalatın ise azalttığını ortaya koymuştur. Enflasyon, faiz harcamaları ve ihracat anlamlı bir etki göstermemiştir. Sonuç olarak, Türkiye’de bütçe stresi ekonomik ve politik dinamiklerin etkileşimiyle şekillenmekte olup, bu durum mali politika oluşturma sürecinde dikkate alınması gereken önemli bir unsurdur.

DO EURO AO REAL: EXPLORANDO A ALFABETIZAÇÃO E A INCLUSÃO FINANCEIRAS ENTRE FRANCESES E BRASILEIROS

2025-06-23

Graziela Dias , Ana Luiza Paraboni , Luiza Botega Goularte | Revista de Administração Contabilidade e Economia da Fundace

Os períodos de crise levaram muitas pessoas a enfrentar realidades extremamente desafiadoras, enfatizando a importância da alfabetização financeira para decisões bem informadas. Somado a isso, a inclusão financeira também se … Os períodos de crise levaram muitas pessoas a enfrentar realidades extremamente desafiadoras, enfatizando a importância da alfabetização financeira para decisões bem informadas. Somado a isso, a inclusão financeira também se torna essencial, pois serviços como acesso a contas bancárias, crédito e seguros são fundamentais para o alcance do bem-estar. Assim, este estudo comparou as diferenças de alfabetização e inclusão financeiras de países com realidades distintas, no caso, Brasil e França. A pesquisa caracteriza-se como descritiva e quantitativa, considerando a abordagem survey para coleta dos dados. Foram obtidas 213 respostas por meio da aplicação de questionário online, que concederam informações sobre o perfil, conhecimento, atitude, comportamento e inclusão financeira dos respondentes. Após análise dos dados através de testes de diferença de média, observou-se que as principais diferenças estão nas variáveis atitude e inclusão financeira, onde em ambas, os brasileiros conseguiram resultados melhores que os franceses. Os modelos de regressão corroboraram os resultados.

When Indicators Guide Bills: Empirical Evidence from Brazil

2025-06-23

Lucas Gonçalo Mateus , Jose Luiz Rossi , Mathias Schneid Tessmann +1 more | Chinese Political Science Review

Constructing Country‐Specific Debt Indices for Developing Countries

2025-06-22

Akeem Rahaman , Scott M. R. Mahadeo | Review of Development Economics

ABSTRACT Contemporary crises continue to keep governments in protracted periods of borrowing, increasing the stock and flow of sovereign indebtedness. Especially for developing economies and small states, singular metrics of … ABSTRACT Contemporary crises continue to keep governments in protracted periods of borrowing, increasing the stock and flow of sovereign indebtedness. Especially for developing economies and small states, singular metrics of public debt such as the debt‐to‐GDP ratio may not reflect the country's true debt position. We consolidate various indicators of public debt to construct a novel composite debt index and its companion debt volatility index. We demonstrate our approach, based on principal component analysis, using a natural resource‐rich but relatively data‐poor country, Trinidad and Tobago, where debt management is a recurring macroeconomic concern, but comprehensive debt indices remain unavailable. The movements in our indices align with historical episodes that would influence country‐specific public debt levels. Our approach is straightforward to adapt and apply to developing countries, where a uniform measure of debt is either unavailable or provides an incomplete perspective of fiscal stress when such a measure exists. We further illustrate the usefulness of the constructed indices by investigating the debt‐growth nexus. Consistent with several empirical studies, our novel debt indices for this country provide evidence of a negative, significant, and robust impact of debt on growth when the traditional debt‐to‐GDP measure suggests none.

Sustainability of state government debts in Brazil

2025-06-20

Felipe Soares Luduvice , Manoel Carlos de Castro Pires | EconomiA

Monetary Adjustment Heterogeneity in the EU under the Perils of Quantitative Easing: A Non-Stationary Heterogeneous Panel Approach

2025-06-20

STOJKOV Stefan , BEKER PUCAR Emilija , SEKULIĆ Aleksandar | ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH

Türkiye’de finansal açıklığın bütçe dengesi üzerine etkisi: 1990-2023 dönemi için bir uygulama

2025-06-20

Yasin Karadeniz | Ardahan Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi

Bu çalışma, 1990-2023 dönemi için Türkiye’de finansal açıklığın bütçe dengesi üzerindeki etkisini ampirik olarak araştırmaktadır. Çalışma, değişkenlerin özelliklerine bağlı olarak ekonometrik analizde ARDL Sınır Testi yöntemini kullanılmaktadır. Yapılan analiz sonucu … Bu çalışma, 1990-2023 dönemi için Türkiye’de finansal açıklığın bütçe dengesi üzerindeki etkisini ampirik olarak araştırmaktadır. Çalışma, değişkenlerin özelliklerine bağlı olarak ekonometrik analizde ARDL Sınır Testi yöntemini kullanılmaktadır. Yapılan analiz sonucu elde edilen bulgular, belirtilen dönemde Türkiye’de finansal açıklığın bütçe dengesi üzerinde istatistiksel olarak anlamlı bir etkiye sahip olduğunu göstermektedir. Bulgulara göre, artan finansal açıklık karşısında merkezi yönetimin borçlanma gereğinde azalış olmaktadır. Bu sonuç, Türkiye’de artan finansal açıklığın mali disiplini olumlu bir şekilde etkilediğini ortaya koymaktadır.

Transforming Somalia’s Public Financial Management: Reforms, Federalism, and Economic Resilience in a Post-Conflict State

2025-06-19

Khalid Mohamed Mohamud | Research Square (Research Square)

<title>Abstract</title> Somalia’s public financial management (PFM) reforms over the past decade illustrate the challenges and opportunities of rebuilding state institutions in a post-conflict context. This study examines the evolution of … <title>Abstract</title> Somalia’s public financial management (PFM) reforms over the past decade illustrate the challenges and opportunities of rebuilding state institutions in a post-conflict context. This study examines the evolution of PFM reforms in Somalia from their formal initiation in 2013 to 2024, focusing on governance enhancements, fiscal federalism dynamics, the adoption of digital financial tools, alignment with international best practices, and the economic impacts of these reforms. A mixed-methods approach is employed, combining qualitative analysis of policy documents and literature with quantitative examination of fiscal data. The findings show that Somalia has made notable progress in establishing a PFM legal framework (including a 2019 PFM Act and related laws), implementing financial management information systems and a Treasury Single Account, and adopting international standards like the <bold>International Public Sector Accounting Standards (IPSAS)</bold>. These reforms have improved fiscal discipline and transparency, evidenced by the publication of audited federal accounts and a rise in domestic revenue collection. However, Somalia’s PFM system continues to face significant challenges: intergovernmental fiscal arrangements remain only partially resolved, domestic revenue is low at about 5% of GDP, and capacity constraints persist at sub-national levels. Comparative analysis with other post-conflict countries (e.g. Afghanistan, Liberia, Sierra Leone) indicates that sustained political commitment—often driven by external incentives such as debt relief—and a focus on basic PFM controls have been essential to progress. The discussion highlights policy implications for Somalia, including the urgent need to formalize fiscal federalism agreements, strengthen accountability institutions, and ensure PFM reforms translate into improved public services. The paper concludes with recommendations to consolidate gains (such as broadening the tax base, enhancing budgetary oversight, and leveraging digital tools for efficiency) and outlines priority actions to achieve a resilient, transparent, and inclusive PFM system that can underpin Somalia’s broader state-building and economic development goals.

European sovereign debt control through reinforcement learning

2025-06-18

Tato Khundadze , Willi Semmler | Frontiers in Artificial Intelligence

The resilience of economic systems depends mainly on coordination among key stakeholders during macroeconomic or external shocks, while a lack of coordination can lead to financial and economic crises. The … The resilience of economic systems depends mainly on coordination among key stakeholders during macroeconomic or external shocks, while a lack of coordination can lead to financial and economic crises. The paper builds on the experience of global and regional shocks, such as the Eurozone crises of 2009–2012 and the economic disruption resulting from COVID-19, starting in 2020. The paper demonstrates the importance of cooperation in monetary and fiscal policies during emergencies to address macroeconomic non-resilience, particularly focusing on public debt management. The Euro area is chosen as the sample for testing the models presented in the paper, given that its resilience is heavily dependent on cooperation among different actors within the region. The shocks affecting nations within the European Union are asymmetric, and the responses to these shocks require coordination, considering heterogeneous economic structures, levels of economic development, and policies. We develop a macroeconomic modeling framework to simulate fiscal and monetary policy interactions under a cooperative regime. The approach builds on earlier nonlinear control models and incorporates modern reinforcement learning techniques. Specifically, we implement the Soft Actor-Critic algorithm to optimize policy responses across key variables including inflation, interest rates, output gaps, public debt, and government net lending. We demonstrate that the Soft Actor-Critic algorithm provides comparable or, in some cases, better solutions to multi-objective macroeconomic optimization problems, in comparison to Nonlinear Model Predictive Control (NMPC) algorithm.

Senate Republicans Unveil Budget Reconciliation Package: Unpacking The Coverage Provisions

2025-06-18

| Forefront Group

Assessing the impact of fiscal consolidation uncertainty on South Africa’s foreign debt

2025-06-18

Eugene Msizi Buthelezi | Journal of Economic Studies

Purpose This study aims to investigate the impact of fiscal consolidation uncertainty on South Africa’s total foreign debt from the first quarter of 1960 to the third quarter of 2022. … Purpose This study aims to investigate the impact of fiscal consolidation uncertainty on South Africa’s total foreign debt from the first quarter of 1960 to the third quarter of 2022. It seeks to fill a gap in the literature by analyzing how uncertainty in government budget indicators influences foreign debt dynamics. Design/methodology/approach To achieve this objective, the study employs time-varying conditional autoregressive (ARCH), generalized autoregressive conditional heteroskedasticity (GARCH) models and Markov-switching dynamic regression. These econometric techniques are utilized to examine the relationship between fiscal consolidation uncertainty and total foreign debt, considering different regimes of fiscal policy. Findings The findings suggest a positive correlation between uncertainty in the cyclically adjusted primary balance (CAPB) and South Africa’s total foreign debt. This indicates that increased uncertainty in government revenue and expenditure leads to a greater reliance on foreign borrowing to finance deficits. Originality/value This study contributes to the literature by accounting for time-varying elasticity in CAPB and analyzing its impact on total foreign debt. By highlighting the importance of effective revenue management, tax administration and risk management strategies, it provides valuable insights for policymakers aiming to stabilize government revenue streams and mitigate the adverse effects of fiscal consolidation uncertainty on foreign debt.

From Policy to Impact: Fiscal Incidence Analysis in Armenia

2025-06-16

| Washington, DC: World Bank eBooks

Debt Considerations for the 21st Century

2025-06-16

Aaron Thegeya | Routledge eBooks

Reelected mayors and local fiscal policy outcomes. Are incumbent mayors more competent compared to newly elected ones?

2025-06-15

Joanna Siwińska‐Gorzelak , Grażyna Bukowska | Local Government Studies

Türkiye ekonomisi kamu borç stokunun sistem dinamiği ile analizi

2025-06-13

ALTINOK HATICE | İktisadi ve İdari Bilimler Fakültesi Dergisi

Çalışmanın amacı, Türkiye ekonomisi için büyük önem taşıyan kamu borç stokunun yapısını belirleyen dinamik bir makroekonomik model geliştirmektir. Ayrıca sistem dinamiği yöntemi kullanılarak kamu borç stoku ilişkilerinin ve unsurlarının belirlenmesidir. … Çalışmanın amacı, Türkiye ekonomisi için büyük önem taşıyan kamu borç stokunun yapısını belirleyen dinamik bir makroekonomik model geliştirmektir. Ayrıca sistem dinamiği yöntemi kullanılarak kamu borç stoku ilişkilerinin ve unsurlarının belirlenmesidir. Böylece, borç yapısı sistem dinamiği modeli ile çeşitli değişkenlerle gösterilmiş ve politika yapıcıların finansal sistemi daha dengeli ve verimli yönetmeleri için güçlü bir araç oluşturulmuştur. Bu çalışmada iç ve dış borcun bileşimiyle kurulan sistem dinamiği modeli Türkiye ekonomisi için analiz edilmiştir. Bu model ile Türkiye ekonomisine ait 2002-2023 dönemini kapsayan verilerle çeşitli senaryolar oluşturulmuş ve böylece ekonomide kamu borç stokunun sürdürülebilirliğinin nasıl ve hangi değişkenlerle sağlanabileceği gösterilmeye çalışılmıştır. Senaryolar sonucunda kamu borç stokunun sürdürülebilir olması için, bütçe açığının kontrol altında tutulmasını sağlayan bir politika yapısı gerekmektedir. Ayrıca kamu harcamalarının da azaltılarak yurt içi tasarrufların teşvik edilmesi sağlanmalıdır.

Økonomisk statshåndverk og nasjonal sikkerhet: Hvordan kan fremmede stater benytte økonomiske virkemidler på sikkerhetstruende måter?

2025-06-13

Petter Y. Lindgren , Kristin Waage | Internasjonal politikk

I politiske kretser og sikkerhetsmiljøer er det langt større oppmerksomhet om hvordan økonomi og nasjonal sikkerhet henger sammen i dag enn for bare noen år siden. Et sentralt spørsmål mange … I politiske kretser og sikkerhetsmiljøer er det langt større oppmerksomhet om hvordan økonomi og nasjonal sikkerhet henger sammen i dag enn for bare noen år siden. Et sentralt spørsmål mange stiller seg er: hvordan kan fremmede stater benytte økonomiske virkemidler på sikkerhetstruende måter? I denne artikkelen gyver vi løs på dette spørsmålet for norsk, nasjonal sikkerhet. Først utleder vi en typologi over potensielt sikkerhetstruende økonomisk statshåndverk. Typologien strukturerer sikkerhetstruende handlingsmåter etter to sentrale dimensjoner: maktbruk og maktkanal. Deretter diskuterer vi hvordan og hvorvidt Kina og Russland kan true nasjonale sikkerhetsinteresser i Norge ved å ta i bruk de ulike handlingsmåtene i typologien. Avslutningsvis peker vi på utfordringer i studiet av koblingen mellom økonomi og norsk, nasjonal sikkerhet. Abstract in EnglishEconomic Statecraft and National Security: How Foreign States’ Use of Economic Means Can Threaten Norwegian SecurityThe attention to links between the economy and national security has grown tremendously the past decade. A key question is how foreign states can challenge national security by using economic means. In this article we delve into this question for Norwegian national security. First, we develop a typology over potentially security threatening economic statecraft. The typology structures security threatening methods by two primary dimensions, namely power use and power channel. Second, we discuss whether and how China and Russia can threaten national security interests in Norway by exploiting the different methods in the typology. Finally, we emphasize challenges in the study of the symbiosis between the economy and Norwegian national security.

Inflation and Regulation of Government Debt: US Historical Evidence

2025-06-12

Jonathan L. Payne , Bálint Szőke | Annual Review of Financial Economics

Governments have often used two policy instruments to lower financing costs: the money supply to generate seigniorage and regulation of the financial system to increase demand for their interest-bearing bonds. … Governments have often used two policy instruments to lower financing costs: the money supply to generate seigniorage and regulation of the financial system to increase demand for their interest-bearing bonds. Both involve trade-offs. This article marshals historical evidence and economic theories about how the US federal government has arranged monetary, financial, and fiscal systems since 1800 to lower its financing costs. In doing so, we infer evolving priorities of different US administrations.

Sir! I’d Rather Go to School, Sir!

2025-06-10

Mahdi Majbouri | Economic Development and Cultural Change

The Uncertain Foundations of Fiscal Policy

2025-06-09

D. A. Livesey | Routledge eBooks

Public Revenue Risk Management in Central Governments: A Systematic Literature Review

2025-06-05

Oktarini Khamilah Siregar , Juni Yanti Napitupulu , Register Launli Buaya +1 more | RIGGS Journal of Artificial Intelligence and Digital Business

This study presents a systematic review of recent academic literature on public risk management in central government settings, with a specific focus on the revenue sector. Using the PRISMA-guided Systematic … This study presents a systematic review of recent academic literature on public risk management in central government settings, with a specific focus on the revenue sector. Using the PRISMA-guided Systematic Literature Review (SLR) approach, it analyzes 30 peer-reviewed articles published between 2019 and 2024. The selected articles were classified based on research methods, theoretical frameworks, country contexts, and revenue-related risk phenomena. The findings reveal that the implementation of risk management in central governments remains limited, fragmented, and often symbolic. Risk management practices are not yet fully integrated into strategic decision-making. Key challenges include rigid bureaucratic systems, institutional pressures, and organizational cultures that lack strong risk awareness. Additionally, there is a clear gap between theoretical frameworks and practical application. The study highlights the need for future research to adopt multidisciplinary approaches that align more closely with institutional realities and evolving fiscal challenges. Such research should aim to bridge the gap between theory and practice and offer more adaptive, context-specific strategies for managing public revenue risks. From a practical perspective, this review provides useful insights for policymakers and practitioners in developing risk management systems that go beyond administrative compliance. It promotes the use of risk management as a strategic tool to strengthen fiscal resilience and institutional legitimacy. The study offers original value by combining quantitative and qualitative analyses to build a reflective framework for improving risk governance. It supports a more contextual, participatory, and public value–oriented approach to managing risks in the revenue sector of central governments.

Fiscal Pro-Cyclicality Revisited: Global, Regional, and Country-Level Evidence with a Spotlight on MENA

2025-06-01

Željko Bogetić , Dominik Naeher | Economic Analysis and Policy

Climate change and exchange rate variables: A potential storm of urban debt

2025-06-01

Y. Wang , Hu Li | International Review of Financial Analysis

The Political Economy of Government Spending: Fiscal Rules, Sustainability, and Political Cycles

2025-06-01

António Afonso , Jan‐Egbert Sturm | European Journal of Political Economy

Public Debt Dynamics in Nepal: Balancing Economic Growth and Institutional Governance

2025-06-01

Gyan Mani Adhikari , Santosh Chhetri , Hemanta Rai +2 more | Nepal Journal of Multidisciplinary Research

Background: Nepal faces complex public debt management challenges amid its transition to federalism, post-earthquake reconstruction, and pandemic recovery. With public debt reaching 41.5 percent of GDP by 2021/22 from 25 … Background: Nepal faces complex public debt management challenges amid its transition to federalism, post-earthquake reconstruction, and pandemic recovery. With public debt reaching 41.5 percent of GDP by 2021/22 from 25 percent in 2015/16, understanding the interplay between institutional governance and debt dynamics is crucial for fiscal sustainability. Methods: This study employs the Autoregressive Distributed Lag (ARDL) approach on time series data spanning 1996-2023 to analyze relationships between governance indicators, economic growth, remittances, trade balance, and Nepal's debt-to-GDP ratio. The model incorporates bounds testing to establish cointegration and error correction mechanisms to capture adjustment dynamics. Results: Governance indicators demonstrate a significant positive relationship with debt levels, suggesting initial institutional reforms may require increased borrowing. Remittances and trade balance exhibit strong negative relationships with public debt, indicating their role as alternative financing sources and debt reduction pathways. The error correction model confirms rapid adjustment to equilibrium, validating relationship stability. Conclusion: While institutional governance improvements may initially necessitate higher debt levels, strategic management of remittances and trade balance presents viable debt reduction pathways. Policy recommendations include strengthening governance frameworks, optimizing remittance flows, diversifying trade, and implementing targeted debt management strategies tailored to Nepal's evolving federal structure. Novelty: This research uniquely integrates institutional governance metrics with remittance flows and trade dynamics to provide a comprehensive analysis of debt determinants in Nepal's specific context, offering empirically-grounded policy pathways for balancing development with fiscal sustainability.

A proposed AI-Based Approach to Improving Fiscal Performance

2025-06-01

هيثم خليفة | المجلة العلمية للبحوث والدراسات التجارية

On the Debt to GDP Ratio in Monopolistic Competition

2025-06-01

Yasuhito Tanaka | Folia Oeconomica Stetinensia

Abstract Research background Many people in Japan and other countries believe that national finances will not stand still and will go bankrupt if deficits continue at present level. It is … Abstract Research background Many people in Japan and other countries believe that national finances will not stand still and will go bankrupt if deficits continue at present level. It is like a religion. In this paper, however, we prove that this religion is wrong by using a simple mathematical model. Research methodology This paper uses a macroeconomic model based on microeconomic foundations for consumers and firms with overlapping generations of consumers under monopolistic competition. Results Although fiscal failure or collapse is generally defined as the government debt to GDP ratio going beyond a finite value to an infinite value, i.e., diverging, the following analysis theoretically proves that such a failure does not occur under stable prices or under a constant inflation rate. It is often said that the government debt to GDP ratio will continue to increase if the interest rate on government bonds exceeds the economic growth rate, but we prove that such a fiscal failure does not occur even when the interest rate of government bonds exceeds the growth rate. This paper shows that the debt to GDP ratio converges to or remains at a finite value over time and that the budget deficit over a given period is equal to the difference between the savings of the younger generation of consumers and the savings of the older generation of consumers. Novelty There are few papers that analyze the fact that financial collapse does not occur using mathematical models, and it is worthwhile to do so.

Approaches to Determining the Interaction Modes of Budgetary-Tax and Monetary Policy

2025-06-01

E. Yu. Ablaev | Studies on Russian Economic Development

Fiscal Challenges in Karnataka: Examining Budget Deficits and their Financing

2025-05-31

B M Venkatesha | JNNCE Journal of Engineering and Management

The Intrigue of Municipal Debt Analytics: The Case of Tax-Exempt Tender/Refunding Transactions

2025-05-31

Andrew Kalotay , Martin J. Luby | The Journal of Fixed Income

A model of policy timing: Hedging, pandering, and gambling

2025-05-30

Daniel Gibbs | American Journal of Political Science

Abstract I study a political agency model where a reelection‐seeking politician chooses when to make policy and a voter learns about the politician's competence from its timing, substance, and outcome. … Abstract I study a political agency model where a reelection‐seeking politician chooses when to make policy and a voter learns about the politician's competence from its timing, substance, and outcome. It takes time for the politician to receive information about which policy is in the voter's best interest and for the effect of policy to be observed. Due to perverse electoral incentives, politicians engage in three behaviors that limit electoral accountability. First, politicians hedge by delaying policy to hide potential policy failure from voters. Second, politicians pander late in the electoral cycle where they cannot credibly campaign on the success of an unpopular policy. Third, in the hope of producing visible policy success, politicians gamble by making a prompt policy choice when it is in the voter's best interest to delay. I show how politicians use these behaviors strategically in response to different contingencies and study their implications for electoral accountability.

Impetus to the economy through budget surplus, debt reduction, interest expenses and part of deposits

2025-05-29

S.V. Anureev | Finance and Credit

Subject. This article discusses deleverage as an alternative to the classic budget impulse. Objectives. The article aims to analyze reverse budget and credit multipliers (deleverage). Methods. For the study, I … Subject. This article discusses deleverage as an alternative to the classic budget impulse. Objectives. The article aims to analyze reverse budget and credit multipliers (deleverage). Methods. For the study, I used a comparative analysis, content analysis, and modeling. Results. The article identifies and describes the levels of sustainable GDP growth in various countries, as well as the reasons for its changes. Conclusions and Relevance. The article concludes that the impulse of a budget surplus and the reduction of public debt, interest expenses, and deposits can ensure years of sustainable GDP growth instead of a spike in deficits and debt, limited to quarters of impulse. The results of the research may be useful for developments in the field of budget and monetary policies.