Fiscal sustainability under entitlement spending

2020 ◽  
Author(s):  
Floriana Cerniglia ◽  
Enzo Dia ◽  
Andrew Hughes Hallett
Keyword(s):  
Public Sector ◽  
Panel Data ◽  
Interest Rates ◽  
Empirical Evidence ◽  
Optimal Policy ◽  
Fiscal Sustainability ◽  
The Public ◽  
Dynamic Framework ◽  
Policy Responses ◽  
The Stability

Abstract We develop a simple theoretical framework that can be used not only to assess the stability of debt, but also to evaluate the sustainability of the commitments of the public sector in the presence of entitlement spending. We model the optimal intertemporal path of fiscal variables and the optimal policy responses in this environment, which requires a dynamic framework. Our analysis suggests that even with near-zero interest rates the stability of debt is not guaranteed and that the sustainability of public finances depends on the level of taxes and the persistence of expenditure, as much as on the level of debt. We estimate the model with panel data techniques, finding that our modelling strategy is supported by the empirical evidence and we use calibrated versions of our model to compare different countries.

scholarly journals Does Public Sector Outsourcing Decrease Public Employment? Empirical Evidence from OECD Countries

2018 ◽  
Vol 65 (4) ◽  
pp. 464-484 ◽  
Author(s):  
Niklas Potrafke
Keyword(s):  
Public Sector ◽  
Panel Data ◽  
Empirical Evidence ◽  
Oecd Countries ◽  
Public Employees ◽  
Public Employment ◽  
Jel Codes ◽  
Full Sample ◽  
The Public

Abstract I examine the extent to which public sector outsourcing relates to public employment in Organisation for Economic Co-operation and Development countries. I use new panel data on public sector outsourcing. The sample includes 26 countries over the period 2009–2015. Contrary to common expectations, the results do not suggest that public sector outsourcing expenditure was negatively related to public employment in the full sample. The relation between public sector outsourcing and public employment, however, does vary across countries. If anything, the growth in public sector outsourcing in period t − 1 was positively correlated with the growth in public employment in period t. When public sector outsourcing gives rise to regrouping public employees but not reducing public employment, outsourcing may even increase inefficiencies in the public sector. (JEL codes: L33, J45, P16, C23).

Council House Sales and Residualization

1986 ◽  
Vol 15 (3) ◽  
pp. 273-292 ◽  
Author(s):  
N.J. Williams ◽  
J. Sewel ◽  
F. Twine
Keyword(s):  
Public Sector ◽  
Empirical Evidence ◽  
Social Classes ◽  
General Process ◽  
The Public ◽  
The Right ◽  
The City ◽  
Right To Buy ◽  
Council House

ABSTRACTIt has been argued that council house sales will contribute towards a more general process of residualization of public sector housing. Empirical evidence is presented in this context derived from surveys of purchasers and non-purchasers of council dwellings in the city of Aberdeen. This evidence confirms that purchasers and non-purchasers exhibit different socio-economic characteristics and after only four years of the Right to Buy legislation significant numbers of households in social classes I, II and III have left the public sector via the mechanism of sales. The small number of sales relative to the stock as a whole, however, has meant that the overall contribution of sales towards residualization has been small. This evidence from Aberdeen is compared to evidence from elsewhere and related to the varying pattern of sales across the country as a whole.

Wagner’s Law, Public Employment, and Spanish Regions

2018 ◽  
Vol 64 (3) ◽  
pp. 179-198
Author(s):  
Manuel Jaén-García
Keyword(s):  
Public Sector ◽  
Panel Data ◽  
Structural Breaks ◽  
Empirical Test ◽  
Unit Roots ◽  
Public Employment ◽  
Public Companies ◽  
The Public ◽  
Standard Tool ◽  
Definition Of

Abstract Following Peacock and Musgrave’s rediscovery of Wagner’s Law, the latter became a standard tool used in research on the relationship between growth of public spending and the factors by which it is influenced. However, conventional empirical tests are based on a specification error related to Wagner’s definition of the public sector, which he considered in its totality, including public companies. The present article attempts to correct this error and obtain an approximation to the size of the public sector by considering public employment as a whole, both in public administrations and services and in public companies. To this end, panel data for the Spanish autonomous regions are used in addition to data for the overall public sector. The empirical test is performed utilizing cointegration techniques and unit roots in panel data. Similarly, the possibility of structural breaks in the data is taken into consideration and they are estimated using fictitious variables. JEL classifications: H11; H50; E62 Keywords: public employment; gross domestic product; unit root; cointegration; panel data

scholarly journals REAL RIGIDITIES AND OPTIMAL STABILIZATION AT THE ZERO LOWER BOUND IN NEW KEYNESIAN ECONOMIES

2017 ◽  
Vol 23 (4) ◽  
pp. 1371-1400 ◽  
Author(s):  
Adiya Belgibayeva ◽  
Michal Horvath
Keyword(s):  
Lower Bound ◽  
Interest Rates ◽  
Optimal Policy ◽  
New Keynesian ◽  
Zero Lower Bound ◽  
Wage Setting ◽  
Optimal Stabilization ◽  
Labor Market Segmentation ◽  
Policy Responses ◽  
New Keynesian Models

The paper revisits the literature on real rigidities in New Keynesian models in the context of an economy at the zero lower bound. It identifies strategic interaction among price- and wage-setting agents in the economy as an important determinant of both optimal policy and economic dynamics in deep recessions. In particular, labor market segmentation is shown to have a significant influence on the length of the forward commitment to keep interest rates at zero, the magnitude of the fiscal policy responses as well as inflation volatility in the economy under optimal policy.

Empirical analysis of HPO framework in public sector organizations of Pakistan

2019 ◽  
Vol 15 (2) ◽  
pp. 78-93 ◽  
Author(s):  
Kalimullah Kalimullah ◽  
Mohd Anuar Arshad ◽  
Qaiser Khan ◽  
Shahid Khan
Keyword(s):  
Public Sector ◽  
Empirical Evidence ◽  
Continuous Improvement ◽  
Public Organizations ◽  
Content Type ◽  
The Public ◽  
Public Managers ◽  
Continuous Improvement Process ◽  
Five Factors ◽  
Public Sector Organizations

Purpose Building on high-performance organizations (HPO) framework, the purpose of this paper is to hypothesize the direct impact of five factors of HPO framework on public organizations’ performance in Pakistan. This is first research to employ the partial least squares (PLS) method to provide empirical evidence of the predictive power of the framework in public organizations. Design/methodology/approach This is a cross-sectional study conducted in non-contrived settings thereby keeping researcher interference to a minimum. Data collection was carried out by distributing online questionnaires to 513 employees from three different service-based public organizations in Pakistan. PLS is used to examine the statistical and substantive significance of five factors by employing SmartPLS 3.2.6. Findings This study concludes that the HPO framework has predictive relevance for public organizations’ performance surveyed in this study. Furthermore, three out of the five factors of HPO framework, namely, management quality, workforce quality and long-term orientation have positive relationships, while openness and action orientation (OAO), and continuous improvement process and renewal have a negative relationship with the performance of public sector organizations (PSOs) surveyed in Pakistan. Research limitations/implications The study’s small sample size limits this research, and only quantitative methodology is applied. A significant limitation of this research is that this study relied on a subset of respondents of surveyed organizations and may not representative of the population. Therefore, result should be carefully interpreted as some degree of biasness may be present. Furthermore, findings of the study cannot be generalized to all PSOs of Pakistan. Practical implications The implication for public managers is that the HPO framework has predictive relevance and substantive significance. However, the ideal value of HPO framework will occur when leadership considers HPO factors and struggles persistently to improve performance. The useful implication is that public managers should focus on continuous improvement process and renewal and OAO to meet stakeholders’ satisfaction. Originality/value This study answer two questions, first “is there any significant relationship of five factors of HPO framework with public organizations’ Performance in Pakistan?” and second “what is the predictive relevance level of HPO framework in the Public organizations in Pakistan?” The answers to these research questions will fill the gaps in the literature by providing empirical evidence to the existing knowledge on improvement methods, especially the public sector (PS), and contributing insights on the real world working of the five factors of HPO framework in a PS.

Public investments, productivity and economic growth

2017 ◽  
Vol 66 (2) ◽  
pp. 251-265 ◽  
Author(s):  
Olga Murova ◽  
Aman Khan
Keyword(s):  
Economic Growth ◽  
Public Sector ◽  
Panel Data ◽  
Public Safety ◽  
Tax Revenue ◽  
Content Type ◽  
The Public ◽  
Public Investments ◽  
The Usa ◽  
Service Sectors

Purpose The purpose of this paper is to use stochastic frontier analysis (SFA) to estimate the efficiency of public investments and their impact on economic growth in the USA using panel data. Results of the study show highly significant and positive relationships between gross state product (GSP) and expenditures on education, transportation, health, welfare, and public safety (police and fire), and negative but significant relationships between output and employment in health care and public safety services. Inefficiencies in the study are measured using per capita tax revenue and time. Tax revenue has a very minimal positive and significant effect on efficiency, while time inversely relates to efficiency. Design/methodology/approach The present study uses SFA to investigate the efficiency of government expenditures in five service sectors – education, transportation, health, welfare, and public safety (police and fire), using recent data and economic trends. The study hypothesizes that changes in the current levels of expenditures in the public sector have a significant impact on the aggregate economy, as measured by GSP. The study uses GSP as the dependent (output) variable, and government expenditure on the five service sectors as the independent (input) variables. Findings Analysis of efficiency for individual states for all 21 years produced interesting results. Overall, the technical efficiency of the public sector was quite high. The average TE score across all years and all states was 0.878. This suggests that public sector operates at a relatively high efficiency level. Originality/value The current SFA model followed Battese and Coelli approach of estimating efficiency of public sectors in each state of the USA. It allowed estimation of policy impact on the overall efficiency. It was applied to macroeconomic panel data.

scholarly journals Sharing the Burden: Monetary and Fiscal Responses to a World Liquidity Trap

2013 ◽  
Vol 5 (3) ◽  
pp. 190-228 ◽  
Author(s):  
David Cook ◽  
Michael B Devereux
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Optimal Policy ◽  
Liquidity Trap ◽  
Relative Prices ◽  
Policy Responses ◽  
Global Liquidity ◽  
Initial Shock ◽  
Monetary And Fiscal Policy ◽  
Zero Bound

This paper analyzes optimal policy responses to a global liquidity trap. The key feature of this environment is that relative prices respond perversely. A fall in demand in one country causes an appreciation of its terms of trade, exacerbating the initial shock. At the zero bound, this country cannot counter this shock. Then it may be optimal for the partner country to raise interest rates. The partner may set a positive policy interest rate, even though its “natural interest rate” is below zero. An optimal policy response requires a mutual interaction between monetary and fiscal policy. (JEL E12, E32, E44, E52, E62, F44, G01)

scholarly journals Integrative literature review of the financial fragility hypothesis proposed by Minsky

2021 ◽  
Author(s):  
Cláudio Caríssimo ◽  
Francisval Melo Carvalho ◽  
carlos eduardo Stefaniak Aveline ◽  
Mozar José de Brito ◽  
rafaela maiara caetano
Keyword(s):  
Public Sector ◽  
Fiscal Policy ◽  
Literature Review ◽  
Interest Rates ◽  
Cash Flow ◽  
Empirical Studies ◽  
Financial Fragility ◽  
Financial Instability ◽  
The Public ◽  
Theoretical Assumptions

<p>This paper conducts an Integrative Literature Review on the Financial Fragility Hypothesis presented by Minsky and on Financial Fragility Applied to the Public Sector. Twenty papers were chosen that addressed the proposed theme in both quantitative and qualitative procedures. The topics discussed ways of measuring financial fragility, effects on fiscal policy and need for regulation, relations between investment, cash flow expectations, the influence of interest rates and indebtedness on firms, and financial instability. The integration reinforced the conceptual aspects and propositions presented by Minsky, broadening in an integrated way the understanding of his theoretical assumptions regarding financial fragility, addressing the causes, observations, and economic and institutional consequences, in addition to signaling for insufficiencies of more empirical studies and the public sector.</p>

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