Expansionary Policy in Pandemics, a Dynamic Model Examination

The objective of this paper is to examine the issue of expansionary policies during the pandemic in Mexico. To do so, we use a dynamic model of the interaction between Covid-19 and economic output. We find that expansionary policies are desirable but that they alone cannot prevent the acceleration of the pandemic. We also model supplementary policies, especially public health policies, and find that in their presence expansionary economic policies can put the economy on track while simultaneously addressing the pandemic. Our analysis’s implications are straightforward: countercyclical economic policies are desirable when there are other supplementary policies. A limitation of our analysis is that it is circumscribed to the Mexican context. The paper is a novel contribution to the burgeoning literature on Covid-19 in Mexico because it is the first which formally examines the issue of expansionary policies during the pandemic. We conclude that both expansionary policies and supplementary policies are needed to achieve a sustainable recovery.

Choosing Peace Instead of War. A Lesson from Athenian Democracy

The present essay discusses how a society can make decisions on specific issues according to how flexible or rigid it is in accepting new ideas and trends. Then, it explains how Athenian society abandoned war in favor of a grand peace strategy during the second half of the 4th century BCE. To achieve this, two visionary Athenian policymakers, Eubulus and Lycurgus, introduced fiscal expansionary policy programs which proved beneficial for the majority of the citizens. Through expansionary public works programs, Athenian citizens were now able to make decisions based on rational choices, based on a wider economic prospective. They could now gain more during periods of peace (as traders, ship-owners, “industrialists” etc.), providing compensation to the poor.

How Richard Nixon Pressured Arthur Burns: Evidence from the Nixon Tapes

Evidence from the Nixon tapes, now available to researchers, shows that President Richard Nixon pressured the chairman of the Federal Reserve, Arthur Burns, to engage in expansionary monetary policies in the run-up to the 1972 election. This paper quotes the relevant conversations from the Nixon tapes. Questions remain as to whether Burns followed an expansionary policy in an already-inflationary environment out of conviction or because of political pressure.

Electoral and Partisan Cycles in the Canadian Provinces

This study tests explanations of the growth of Canadian provincial governments that draw from the political budget cycle approach. The approach assumes that governments jointly respond to electoral and partisan goals. When the next election is not expected soon, the government uses its discretionary power to pursue its ideological target. When the next election is near, politicians in government, fearing electoral defeat, deviate from their normal behaviour and engage in a re-election effort by undertaking an expansionary policy. This study suggests that provincial governments behave in the opportunistic fashion described by the model. Moreover, there is no sign that this opportunistic behaviour has been affected by government cutbacks in the 1990s.