Austerity and Expansion

This chapter describes the outbreak of military crises on the Korean Peninsula, the worsening of the domestic depression brought on primarily by Matsukata's own currency contraction, and other exigencies which prompted him instead to increase government spending, generating fiscal deficits that he financed not by boosting tax revenues but by promoting exports and selling public bonds. In responding to these trends through a pragmatic embrace of public bond issuance and state-led export promotion, Matsukata departed significantly from classical economic liberalism. He began turning toward such positive policies as early as 1883. In that regard, the Matsukata financial reform as it unfolded combined the contractionary program of Sano with the expansionary approach of Ōkuma. This policy mix, in turn, would help shorten a sharp, deflation-induced depression that Matsukata initially expected would continue for a year or two longer.

Prosperity of the Process and Issuance of Regional Bonds and Risk of Public Bonds Registration in Indonesia

Making transactions can get a lot of profit, then there are several ways, one of which is in the form of investing. To make investments can be done by individuals or a person entity that has excess funds or is often called a company securities. Regulations regarding risk in Municipal Bonds are not the same as arrangements in corporate bonds and corporate bonds themselves, basically payment of Municipal Bonds made by this Regional Government comes from funds from the utilization / use of infrastructure built from publishing the regional bonds and reserve funds in the APBD must be allocated to repayment. it is important to research how to regulate and the process of issuing regional bonds. From this background can be drawn formulation of the problem, namely, How to Analyze the regulation and issuance process of Bonds Regions in Indonesia?The results of the formulation of the problem that the author took was that all the rulesrelated to procedures and issuance of municipal bonds is clear and regulated in law -invite, namely Law Number 33 of 2004 concerning Financial Balance between the Central Government and Regional Government, Government Regulation Number 30 In 2011 concerning Regional Loans, Minister of Finance Regulation Number 180 / PMK.07 / 2015 concerning Amendments to Regulation of the Minister of Finance Number 111 / PMK.07 / 2012 concerning Procedures for Issuance and Accountability of Bonds Area. Issuance of bonds can also be done through a public offering.

Social Capital and Debt Contracting: Evidence from Bank Loans and Public Bonds

We find that firms headquartered in U.S. counties with higher levels of social capital incur lower bank loan spreads. This finding is robust to using organ donation as an alternative social capital measure and incremental to the effects of religiosity, corporate social responsibility, and tax avoidance. We identify the causal relation using companies with a social-capital-changing headquarters relocation. We also find that high-social-capital firms face loosened nonprice loan terms, incur lower at-issue bond spreads, and prefer public bonds over bank loans. We conclude that debt holders perceive social capital as providing environmental pressure that constrains opportunistic firm behaviors in debt contracting.

Nominal Anchoring with Liquid Monetary Policy Assets

The chapter shows that existence of a unique Rational Expectations equilibrium can be ensured even if the Taylor Principle – stating that the policy interest rate increases by more than the increase in the expected rate of inflation – does not hold. This is shown by extending a barebones' central bank monetary model to the case in which liquidity is produced by both money and public bonds. The discussion concludes that liquidity considerations may have a critical impact on the monetary policy implications derived from the mainstream model.

Fiscal costs of monetary policy: indirect effects of an interest rate shock on Brazilian public net debt

ABSTRACT: The paper estimates the fiscal cost of an increase in the Brazilian policy interest rate - the SELIC - by considering not only the direct effect on the yield of public bonds that are indexed to the SELIC, but also indirect effects on: (i) the yield of public bonds that are indexed to the exchange rate and inflation, and (ii) the stock of public net debt through adjustments in the value of international reserves measured in domestic currency. Projections are based on the estimation of the relationship between interest rates, exchange rates and inflation by means of a vector auto-regression. We conclude that the inclusion of such indirect effects has an ambiguous effect on the response of the implicit interest rate on public net debt to shocks in the SELIC, when adjustments in the value of international reserves are not considered. However, the inclusion of the latter amplifies the fiscal cost of a more restrictive monetary policy. These results call for a better coordination between monetary, fiscal and exchange rate policies in Brazil.

DEBT AND DEFICIT FLUCTUATIONS IN A TIME-CONSISTENT SETUP

This paper compares the stochastic behavior of fiscal variables under optimal fiscal policy for the cases of full commitment by the government (Ramsey problem) and no commitment by the government (focusing on differentiable Markov perfect equilibrium). It shows that the cyclical properties of fiscal variables are similar for both commitment assumptions. These conclusions are robust to two different specifications of the structure of public bonds (risk-free and state-contingent) and to different sets of the parameters. The cyclical properties of fiscal variables, regardless of commitment assumptions, can be determined by the parameters of the utility function.