There is a growing groundswell of opinion in commentary on the political economy of the Global North that the neoliberal era has seen the forceful (re)emergence of rentier capitalism. This article ...analyses the case of the UK. Identifying and delineating the predominant forms of contemporary rentierism operating in the UK, and using a range of datasets pertaining to the shape of the national economy, it shows that rentierism in its various guises is today a significant, even dominant, dynamic, in contrast to during the period preceding the neoliberal turn. The article further seeks to account for the ascendancy of the rentier in the UK under neoliberalism, highlighting key developments in the realms of monetary and fiscal policy and policies relating to asset ownership and property rights.
Low-income countries typically collect taxes of between 10 to 20 percent of GDP while the average for high-income countries is more like 40 percent. In order to understand taxation, economic ...development, and the relationships between them, we need to think about the forces that drive the development process. Poor countries are poor for certain reasons, and these reasons can also help to explain their weakness in raising tax revenue. We begin by laying out some basic relationships regarding how tax revenue as a share of GDP varies with per capita income and with the breadth of a country's tax base. We sketch a baseline model of what determines a country's tax revenue as a share of GDP. We then turn to our primary focus: why do developing countries tax so little? We begin with factors related to the economic structure of these economies. But we argue that there is also an important role for political factors, such as weak institutions, fragmented polities, and a lack of transparency due to weak news media. Moreover, sociological and cultural factors—such as a weak sense of national identity and a poor norm for compliance—may stifle the collection of tax revenue. In each case, we suggest the need for a dynamic approach that encompasses the two-way interactions between these political, social, and cultural factors and the economy.
The optimisation of the cyclical adjustment procedure under the German debt brake should focus on how to contribute to a democratically legitimate and sustainable fiscal policy. in this article, we ...discuss four criteria that should be satisfied: The method must (i) be sufficiently determined, (ii) take the current state of research into account, (iii) incentivise a policy that enhances supply-side capacities, and (iv) be transparent. We show that today's form of the cyclically adjusted budget balance does not satisfy these criteria, and we propose a reform. Finally, we discuss several recent trends in German fiscal policy, questioning whether such a reform can save the debt brake's plausibility. Die Ampelkoalition hat sich im Koalitionsvertrag darauf geeinigt, das Konjunkturbereinigungsverfahren im Rahmen der Schuldenbremse zu uberprufen. Im Zentrum des Prozesses steht die Schatzung des Produktionspotenzials. Es soll die Normallage der Volkswirtschaft beschreiben und bestimmt massgeblich die Hohe der Konjunkturkomponente. Das Verfahren, auf dem die Potenzialschatzung beruht, ist vielfaltiger Kritik ausgesetzt, unter anderem aufgrund seiner Prozyklizitat und Revisionsanfalligkeit. Hier mit der Kritik zu beginnen, greift jedoch zu kurz. Denn bevor es um die Optimierung der Schatzmethodik geht, sollten Kriterien dafur ausbuchstabiert werden, wie sie zu einer demokratisch legitimierten Fiskalpolitik beitragen kann.
In the production function-based approach proposed by the European Commission for the estimation of the potential output, trend total factor productivity (TFP) is indirectly estimated on the basis of ...cyclical factors. Instead, this article proposes a more economics-based foundation of trend-TFP that is based on the arguments of the endogenous growth theory. A simple econometric exercise shows how the application of this approach may lead to a significantly different assessment of the potential output and, by extension, of the economy's output gap. This may have far-reaching consequences for the conduct of monetary and fiscal policy, e. g. in the context of the German debt brake.
Fiscal policy was more countercyclical during the Covid-19 crisis than in previous (crisis) episodes. This paper presents empirical evidence in favour of a “this time truly is different” moment based ...on analysing the cyclical behaviour of fiscal policy for 28 advanced economies over 1995–2021. Discretionary fiscal policy during the Covid-19 crisis (2020–2021) did more to counteract the downturn – especially in the Eurozone –, as we do not find comparable evidence for countercyclicality during the financial crisis or Euro crisis. Automatic fiscal stabilisers, the non-discretionary domain of fiscal policy, significantly contributed to countercyclical stabilisation during the pandemic.
The output effect of fiscal consolidation plans Alesina, Alberto; Favero, Carlo; Giavazzi, Francesco
Journal of international economics,
07/2015, Letnik:
96, Številka:
Supp.1
Journal Article
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We show that the correct experiment to evaluate the effects of a fiscal adjustment is the simulation of a multi-year fiscal plan rather than of individual fiscal shocks. Simulation of fiscal plans ...adopted by 16 OECD countries over a 30-year period supports the hypothesis that the effects of consolidations depend on their design. Fiscal adjustments based upon spending cuts are much less costly, in terms of output losses, than tax-based ones and have especially low output costs when they consist of permanent rather than stop-and-go changes in taxes and spending. The difference between tax-based and spending-based adjustments appears not to be explained by accompanying policies, including monetary policy. It is mainly due to the different responses of business confidence and private investment.
This paper estimates the incidence of state corporate taxes on the welfare of workers, landowners, and firm owners using variation in state corporate tax rates and apportionment rules. We develop a ...spatial equilibrium model with imperfectly mobile firms and workers. Firm owners may earn profits and be inframarginal in their location choices due to differences in location-specific productivities. We use the reduced-form effects of tax changes to identify and estimate incidence as well as the structural parameters governing these impacts. In contrast to standard open economy models, firm owners bear roughly 40 percent of the incidence, while workers and landowners bear 30-35 percent and 25-30 percent, respectively.
We implement a meta-regression-analysis for the budgetary impact of numerical fiscal rules based on 30 studies published in the last decade. The existing empirical evidence points to a constraining ...effect of rules on fiscal aggregates. However, this seemingly optimistic message is strongly weakened as our analysis points to a bias if the potential endogeneity of fiscal rules is not explicitly taken into account. Furthermore, our analysis provides evidence for the presence of a publication bias. Both sources of bias reduce the statistical precision of obtained effects below usual levels of statistical significance. In addition, we offer suggestive evidence for the effect size based on a small coherent sub-sample and provide recommendations for future research on the budgetary impact of fiscal rules.
We investigate the fiscal impact of immigration on the UK economy, with a focus on the period since 1995. Our findings indicate that, when considering the resident immigrant population in each year ...from 1995 to 2011, immigrants from the European Economic Area (EEA) have made a positive fiscal contribution, even during periods when the UK was running budget deficits, while Non-EEA immigrants, not dissimilar to natives, have made a negative contribution. For immigrants that arrived since 2000, contributions have been positive throughout, and particularly so for immigrants from EEA countries. Notable is the strong positive contribution made by immigrants from countries that joined the EU in 2004.
Rising Government Debt Yared, Pierre
The Journal of economic perspectives,
04/2019, Letnik:
33, Številka:
2
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Over the past four decades, government debt as a fraction of GDP has been on an upward trajectory in advanced economies, approaching levels not reached since World War II. While normative ...macroeconomic theories can explain the increase in the level of debt in certain periods as a response to macroeconomic shocks, they cannot explain the broad-based long-run trend in debt accumulation. In contrast, political economy theories can explain the long-run trend as resulting from an aging population, rising political polarization, and rising electoral uncertainty across advanced economies. These theories emphasize the time-inconsistency in government policymaking, and thus the need for fiscal rules that restrict policymakers. Fiscal rules trade off commitment to not overspend and flexibility to react to shocks. This tradeoff guides design features of optimal rules, such as information dependence, enforcement, cross-country coordination, escape clauses, and instrument versus target criteria.
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