An Analysis of the Relative Effectiveness of Monetary and Fiscal Policies on Economic Performance in Five CARICOM Member States: Barbados, Belize, Guyana, Jamaica and Trinidad and Tobago

2020 ◽  
Author(s):  
Samuel P. Indalmanie
Keyword(s):  
Trinidad And Tobago ◽  
Economic Performance ◽  
Relative Effectiveness ◽  
Fiscal Policies ◽  
Member States

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.

Theoretical approaches on the possible existence of a stabilising economic policy in Europe

2016 ◽  
Vol 43 (5) ◽  
pp. 815-834 ◽  
Author(s):  
Alessandro Morselli
Keyword(s):  
Fiscal Policy ◽  
Cooperative Games ◽  
Policy Coordination ◽  
Fiscal Policies ◽  
Policy Mix ◽  
Member States ◽  
Content Type ◽  
Theoretical Approaches ◽  
Non Cooperative Games ◽  
Fiscal Policy Coordination

Purpose The purpose of this paper is to investigate whether there is room for a stabilising fiscal policy, through an analysis of the supporters of the new classical economics and the supporters of the new Keynesian economics. There are no reliable results on the Keynesian and non-Keynesian effects of fiscal policies. As such, the policy-mix becomes a problem of theoretical approach, in the sense of a strategic game between monetary authorities and tax authorities (among them). This points to the problem of coordination between budgetary authorities as being the central debate within the Eurozone. The end-result is that without fiscal policy coordination, Eurozone member states are working on a series of non-cooperative games that are inefficient, because no player can improve its position by unilaterally changing its strategy. Design/methodology/approach The analysis starts from the experience of three countries in the 1980s, these are Denmark, Ireland and Sweden. In all three cases the adoption of restrictive budget policies has provoked a strong, rapid and enduring resizing of public debt, and growth did not weaken, moreover it accelerated. In all three cases the logic behind the policy-mix actions allowed the individualisation of the respective roles of fiscal and monetary policies. Fiscal policies were joining with fiscal instruments and reduction in public spending and furthermore monetary policy was accommodated in respect of the budget contraction. Findings First, the authors were not able to identify an analytical method that can ensure the success of a fiscal policy. Second, analysing fiscal policies within the Eurozone implies also that the authors reflect on the need for a coordination of these policies. In fact, the authors have shown how the possible coordination of economic policies in the Eurozone would result in major benefits for all member countries. Originality/value In the absence of fiscal policy coordination, member states are engaged in a series of non-cooperative games that prove inefficient, when no player is able to improve its position by unilaterally changing its fiscal policy. The coordination of national fiscal policies generates a collective advantage, bringing each state to consistently change its strategies.

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.  

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