An Analysis of the Relative Effectiveness of Monetary and Fiscal Policies on Economic Performance in Jamaica: A Vector-Autoregression Approach

2016 ◽  
Author(s):  
Samuel P. Indalmanie
Keyword(s):  
Economic Performance ◽  
Vector Autoregression ◽  
Relative Effectiveness ◽  
Fiscal Policies

scholarly journals Relative Effectiveness of Monetary and Fiscal Policies on Output Stabilization in Developing Countries: Evidence from Rwanda

2017 ◽  
Vol 10 (1) ◽  
pp. 220
Author(s):  
Kabanda Richard ◽  
Peter W. Muriu ◽  
Benjamin Maturu
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Relative Effectiveness ◽  
Variance Decomposition ◽  
Var Model ◽  
Fiscal Policies ◽  
Impulse Responses ◽  
Exogenous Variables ◽  
Output Stabilization ◽  
The Government

The aim of this study was to explain the relative effectiveness of monetary and fiscal policies in explaining output in Rwanda. The study used a sample of quarterly data for the period 1996-2014. Applying a recursive VAR, the study used 12 variables, including 5 endogenous and 7exogenous variables to the benchmark model and other two specifications were attempted to capture the true contribution of monetary and fiscal policies to variations in nominal output. Obtained results using impulse responses and variance decomposition provide evidence that monetary policy is more effective than fiscal policy in explaining changes in nominal output in Rwanda. In addition, monetary policy explains better output when the VAR model contains domestic exogenous variables than when they are not included, suggesting the relevance of including domestic exogenous variables in VAR specification of monetary and fiscal policies effectiveness on economic variables. Another suggestion is that in order to achieve higher growth, the government of Rwanda should rely more on monetary policy as compared to fiscal policy.

International Coordination of Fiscal Policies

1988 ◽  
Vol 8 (2) ◽  
pp. 111-124 ◽  
Author(s):  
Vito Tanzi
Keyword(s):  
Economic Performance ◽  
Controversial Issue ◽  
Main Issue ◽  
Positive Contribution ◽  
Fiscal Policies ◽  
Macroeconomic Policies ◽  
International Coordination

ABSTRACTInternational coordination of macroeconomic policies has attracted much attention in recent years. The main issue has been whether economic performance can be improved by coordination. Although still a controversial issue, many economists have argued that coordination would make a positive contribution to economic performance. This paper deals with the requirements for successful fiscal coordination. It concludes that those requirements are such that the best fiscal policies that countries can pursue are those aimed at putting their house in order.

scholarly journals The Dynamics of Inflation Rates in a Consumer Driven Economy

2020 ◽  
Vol 03 (12) ◽  
Author(s):  
Musa Umar ◽  
Keyword(s):  
Interest Rates ◽  
Money Supply ◽  
Relative Effectiveness ◽  
Growth Management ◽  
Output Growth ◽  
Fiscal Policies ◽  
Correction Model ◽  
Inflation Rates ◽  
Sustainable Economic Growth ◽  
Model Approach

The research was motivated by the conviction that inflation entails sizeable economic and social cost, and that for achieving a sustainable economic growth, management of inflation is a prerequisites. Co-integration and autoregressive error correction model approach was used to investigate the effect of money supply, fiscal deficits and export on the relative effectiveness of fiscal policy in Nigerian consumer driven economy. The study reveals there is a significant causal relationship between gross domestic product (GDP) and the variables considered in the research. The Granger causality outcomes demonstrate that t here is no causality between money supply and inflation in Nigeria within the study period, meaning that there are different economic conditions that are key determinant of inflation in Nigeria. We conclude that fiscal policies have a significant influence on the output growth of the economy, and recommend that the Central Bank of Nigeria should guarantee an exchange rate stability and sound monetary surveillance, look inward for ways to regulate the interest rates that will encourage private and foreign investors to transform our consumer driven economy.

scholarly journals Causality Tests and the Relative Effectiveness of Monetary and Fiscal Policies in Pakistan

1992 ◽  
Vol 31 (4II) ◽  
pp. 759-769
Author(s):  
Muhammad Hussain
Keyword(s):  
Monetary Policy ◽  
Economic Activity ◽  
Relative Effectiveness ◽  
Government Expenditure ◽  
Annual Data ◽  
Fiscal Policies ◽  
Money Stock ◽  
Causality Tests ◽  
Relevant Variables ◽  
Total Government Expenditure

The Granger and the Sims causality tests as applied to annual data from Pakistan for the period 1971-72 to 1989-90, help us in arriving at identical conclusions even though in the former test growth rates of the relevant variables were used and in the latter natural logged and filtered variables were used. Both tests detected unidirectional causality running from monetary variables (monetary base and money stock) to nominal GNP in Pakistan for the period under study. Both tests also suggest that there is unidirectional causality running from nominal GNP to the total government expenditure in Pakistan for the period under study. The findings of the study suggest that changes in monetary variables do exert their influence on economic activity, represented by the nominal GNP, in Pakistan. The results of the study also provide some evidence that changes in total government expenditure rather than causing changes in the nominal GNP in Pakistan, are rather influenced by the changes in the nominal GNP. Thus, the findings of the study suggest that the monetary policy was relatively more effective than the fiscal policy in influencing the nominal GNP in Pakistan, during the period under study.

Genesis of Development Macroeconomics and National Accounts in Developing Countries

2020 ◽  
pp. 127-138
Author(s):  
Giovanni Andrea Cornia
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Economic Performance ◽  
Informal Economy ◽  
Public Policies ◽  
Low Income Countries ◽  
Fiscal Policies ◽  
Demand Side ◽  
National Accounts ◽  
The Impact

The chapter discusses the reasons whycKeynesian policies and development macroeconomics in low-income countries received any attention relatively late, as well as the factors that led to a gradual acceptance of demand-side measures. It also discusses the data, conceptual, and accounting problems encountered when measuring economic performance in low-income countries, including the importance of self-consumption, barter, unilateral transactions, and unrecorded monetary transactions in the informal economy. All this reduces the impact of monetary and fiscal policies and underline the importance of structural policies. The chapter also discusses the accounting conventions and practices used to overcome such problems, and the impact all this has on the estimates of the main macroeconomic aggregates and the evaluation of the impact of public policies.

scholarly journals Multivariate Analysis on the Effectiveness of Monetary and Fiscal Policies in Fiji

2020 ◽  
Author(s):  
Jauhari Dahalan ◽  
T.K. Jayaraman
Keyword(s):  
Relative Effectiveness ◽  
Government Expenditure ◽  
National Income ◽  
Error Variance ◽  
Fiscal Policies ◽  
Vector Autoregressive Model ◽  
Monetary Policies ◽  
Vector Autoregressive ◽  
Cointegrating Vector ◽  
The One

By utilising a Cointegrating Vector Autoregressive Model, this paper assesses the relative effectiveness the fiscal and monetary policies on growth. It is observed that government expenditure has the strongest effect on Fiji’s national income which significantly explains Fiji’s GDP error variance even after a three year period with regard to the effect of shocks, we observed that the national income impulse respons to the one standard error shock among all macroeconomic variables, i.e. government expenditure and foreign assets, which is not permanent but transitory.  

scholarly journals The causality between inflation and unemployment: the Indonesian evidence

2019 ◽  
Vol 20 ◽  
pp. 1-10 ◽  
Author(s):  
Gatot Sasongko ◽  
Andrian Dolfriandra Huruta
Keyword(s):  
Granger Causality ◽  
Economic Performance ◽  
Household Income ◽  
Vector Autoregression ◽  
Granger Causality Test ◽  
Central Bureau ◽  
Causality Test ◽  
Determining Factors

Two closely watched indicators of economic performance are inflation and unemployment. This study empirically analyzes the causality between inflation and unemployment in Indonesia during 1984 to 2017. The data were gathered from the Indonesian Central Bureau of Statistics. Methodologically, this study employed the Granger Causality test and Vector Autoregression to determine the causality between inflation and unemployment. The results show that there is a one-way causality between inflation and unemployment. The findings imply that unemployment causes inflation, but not vice versa. Next inflation and unemployment are also closely related to other determining factors, such as season, household income, and the decisions to attend school or to perform the housekeeping.

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