Liability-Creating Versus Non-Liabilitycreating Fiscal Stabilisation Policies: Ricardian Equivalence, Fiscal Stabilisation, And Emu  

Oleh:

Bayoumi, Tamim ; Masson, Paul R.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 108 no. 449 (Jul. 1998), page 1026-1045.
Fulltext: 1026.pdf (225.48KB)

Isi artikel

This paper looks at theoretical and empirical issues associated with the operation of fiscal stabilisers within an economy. It argues that such stabilisers operate most effectively at a national, rather than local, level. As differing cycles across regions tend to offset each other for the country as a whole, national fiscal stabilisers are not associated with the same increase in future tax liabilities for the region as local ones. Accordingly, the negative impact from the Ricardian effects associated with these tax liabilities is smaller. Empirical work on data across Canadian provinces indicates that local stabilisers are only 13 to 12 as effective as national stabilisers which create no future tax liability.

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