Economic Growth with Public Finance: A Theoretical Model for Equilibrium Dynamics and Analytic Solution| Chapter 9 | Contemporary Research in Business, Management and Economics Vol. 9

 

This work analyses the equilibrium dynamics of a growth model with public finance where two different allocations of public resources are considered, namely "institutional" spending and “traditional” core productive spending. Both components of government expenditure are complementary with private production. The model we propose simultaneously determines the optimal proportion of consumption, capital accumulation, taxation and composition of the two different public expenditures which maximize a representative household's lifetime utility in a centralized economy. The model supplies a closed-form solution. Moreover, with one restriction on the parameters (a = s) we fully determine the solution path for all variables included in the analysis and establish the conditions for balanced growth.

 

 

Author(s) Details

 

Oliviero A. Carboni

DiSEA and CRENoS, University of Sassari, Italy.

Paolo Russu

DiSEA, University of Sassari, Italy.

 

 

Please see the link:- https://doi.org/10.9734/bpi/crbme/v9/501

Economic Growth with Public Finance: A Theoretical Model for Equilibrium Dynamics and Analytic Solution | Chapter 9 | Contemporary Research in Business, Management and Economics Vol. 9

This work analyses the equilibrium dynamics of a growth model with public finance where two different allocations of public resources are considered, namely "institutional" spending and “traditional” core productive spending. Both components of government expenditure are complementary with private production. The model we propose simultaneously determines the optimal proportion of consumption, capital accumulation, taxation and composition of the two different public expenditures which maximize a representative household's lifetime utility in a centralized economy. The model supplies a closed-form solution. Moreover, with one restriction on the parameters ( = ) we fully determine the solution path for all variables included in the analysis and establish the conditions for balanced growth.

 

Author (s) Details

 

Oliviero A. Carboni (Associate Professor),
DiSEA and CRENoS, University of Sassari, Italy.

 

Paolo Russu (Senior Professor),
DiSEA, University of Sassari, Italy.

 

Please see the book here:- https://doi.org/10.9734/bpi/crbme/v9/501

Economic Crises, Liberal Fiscal Policies, and Modern Monetary Policy | Chapter 1 | Current Aspects in Business, Economics and Finance Vol. 4

 This article addresses the most recent economic crises, including the global financial crisis and the many-sided coronavirus crisis, as well as the public measures put in place to lessen the effects of the downturn and boost economic growth. Since December 2008, the current target rate (monetary policy) has been set at zero in order to encourage investment, growth, and employment. This new experimental, modern monetary policy (quantitative easing, among other new measures). The abandonment of fiscal policy, the current tax structure in the United States, which lowers disposable income and causes savings to turn negative (dissaving or borrowing), as well as high inflation, which has caused real deposit rates to turn negative, have all contributed to the slow expansion of output and ongoing true unemployment. The COVID-19 issue is a protracted one that has been preserved for political gain, and it appears that people will continue to suffer through it until a new crisis is "created" by the "experts." The national debt and budget deficits have increased dramatically as a result of the policies put in place and the light tax burden placed on businesses. Because of their large debt and low income, people borrow the present value of their uncertain future wealth, which elevates the risk and pushes up the interest rate on loans, notably credit cards. To lower the national debt, the government must increase corporate taxes, minimise unnecessary expenditure (such on the military, national security, and wastes), reduce inefficiencies, and combat corruption (infrastructures). Public policies must be combined in order to prevent crises, increase growth and employment first, then reduce inflation and maintain moderate interest rates (fiscal and monetary). To promote social welfare, fairness, equity, and justice as well as to help the society's 90% middle class, which has been neglected, the current unbalanced monetary policy and tax structure must be altered and made to function optimally. Due to low disposable income, rising unemployment, and unfavourable monetary policy, the middle class cannot be harassed, controlled, or forced to labour merely to pay taxes and interest on its debt (redistribution of its wealth to the government and banks). The decline of the middle class will have a detrimental impact on the nation's whole socioeconomic system and pose a threat to its survival.

Author(s) Details:

Ioannis N. Kallianiotis,
Economics / Finance Department, The Arthur J. Kania School of Management, University of Scranton, Scranton, PA 18510-4602, United States.

Please see the link here: https://stm.bookpi.org/CABEF-V4/article/view/8285

The Economic History of Alexander the Great and his Expedition from Greece to India | Chapter 11 | New Innovations in Economics, Business and Management Vol. 8

 Xenophon is credited with developing economic theory and policy in Ancient Greece. Alexander the Renowned was a superb Hellenic monarch, civilizer, and "forerunner" who lived in the fourth century B.C. He was also a great economist, as he had to manage the economics of his huge campaign from Greece to India, as well as develop an efficient and successful public policy for his large Empire. "He sought neither pleasure or fortune, but only greatness and glory," according to the moral and ethical Greek philosophy of the period. Alexander had stated, "...I am glad the gods that I was birth Hellen..." and possessed all of the Hellenic moral and ethical principles, making him one of the most influential people in history. With salary rates, health and welfare, construction projects, supplies, transportation, tax reforms, indirect taxes and donations, loans, coin minting, and even controlling financial scandals and other information useful to our policymakers today, he had demonstrated exceptional management abilities. We use information from different historians of his time to compute and compare prices, and we use the weights of gold and silver coins to measure his budgets. The goal is to compare the expenses and revenue streams of this trip using the Greek drachma and the US currency as of today. The surpluses of Alexander's economic policies are highly valuable to our modern leaders and experts. Also discussed is the history and role of this extraordinary man, as well as the contribution of Greek civilization and language to God's plan for His revolted and deluded creation and humanity to be able to understand and accept His revelation, which Greeks had been anticipating since the Golden Age of Athens.

Author(S) Details

John N. Kallianiotis
Economics/Finance Department, The Arthur J. Kania School of Management, University of Scranton., Scranton, PA 18510-4602, U.S.A.

View Book:- https://stm.bookpi.org/NIEBM-V8/article/view/6742

Study on Assessing the Role and Contribution of the Fiscal Policy - Monetary policy Combination in Macroeconomic Management: A Case Study from Vietnam (2010–2020) | Chapter 8 | Modern Perspectives in Economics, Business and Management Vol. 7

 Despite the intricate and unpredictable variations in the global economic situation from 2011 to 2020, the Covid 19 epidemic, which began in December 2019, has become increasingly unpredictable and harmful. Vietnam's economy, on the other hand, has been able to overcome its insecurity and regain its GDP growth rate. Contributing to this result must be mentioned the role of fiscal policy and monetary policy, in which the coordination between the two policies is increasingly focused and achieved more effectively. To elucidate the role of monetary policy and monetary policy in macroeconomic management, the study use qualitative methods and multivariable linear regression (MLR). The goal of this research is to better understand and explain the role and contribution of FP and MP in macroeconomic management.

Author(s) Details

Vu Thi Kim Hanh
Van Lang university, Hochiminh City, Vietnam.

View Book ,- https://stm.bookpi.org/MPEBM-V7/article/view/3624

Study on the Balanced Budget Multiplier | Chapter 1 | Modern Perspectives in Economics, Business and Management Vol. 5

 The goal of this note is to calculate the balanced budget multiplier for disposable income. This multiplier is shown to be equal to zero under reasonable conditions. This could explain why a balanced budget's empirical explanatory power on aggregate output is so low. Under Ricardian equivalence, debt-financed government spending can be regarded a balanced budget fiscal policy, according to the article. This also explains why, contrary to expectations, the government spending multiplier is empirically shown to be much less than one, and closer to zero than one. Furthermore, the paper claims that a balanced budget fiscal policy will have little effect on consumption, and that it may even fall. Given the pandemic's consequences, this should raise serious concerns about the present stimulus packages implemented by Western nation governments to boost aggregate demand. There's a good chance that the stimulus initiatives won't be as effective as policymakers had hoped.

Author (S) Details

Samih Antoine Azar
Faculty of Business Administration and Economics, Haigazian University, Mexique Street, Kantari, Beirut, Lebanon.

View Book :- https://stm.bookpi.org/MPEBM-V5/article/view/3325

A Case Study on Macroeconomic Policies and Their Interactions of Czech Republic| Chapter 2 | Insights into Economics and Management Vol. 2

 The paper addresses macroeconomic policy interrelations and future conflicts, and offers an empirical study of monetary and fiscal policy interactions in the Czech Republic. In the event of a significant adverse shock, the optimal combination of macroeconomic policies should promote social and economic welfare and ensure the smooth operation of the economy. One instance of such a condition may be the current global COVID-19 pandemic. While policy-consistent steps against the immediate effects of the crisis are important, the value of policy coordination in the aftermath of the acute period of the recession should also be taken into account. There is also evidence of changes in policy behaviour over time. To this end, a six-variable Bayesian VAR is built and estimated and some refinements are proposed to the modelling system. The results point to the lack of complementarity between policy measures taken by the authorities and indicate that there is still ample space for economic policies to be more successful. In times of severe economic crisis, such as the current COVID-19 pandemic, better coordination between macroeconomic policies is especially needed. A comprehensive study of their contribution to the stabilisation of the economy at various stages of the business cycle, however, is necessary and could be a focus of future research.

Author(s) Details

Pavel Rezabek
Department of Economic and Social Policy, Faculty of Economics, University of Economics, Prague, W. Churchill sq. 4, 130 67 Praha 3, Czech Republic.

Petr Doucek
Department of System Analysis, Faculty of Informatics and Statistics, University of Economics, Prague, W. Churchill sq. 4, 130 67 Praha 3, Czech Republic.

View Book :- https://bp.bookpi.org/index.php/bpi/catalog/book/315