A statistical note on possible institutional regimes in budget policy

Article Abstract:

Statistical tests were used to show that a shift in the regime that generates fiscal policy in favor of continuous deficit policy occurred in 1975, the year in which federal budget development began under the Congressional Budget and Impoundment Control Act of 1974. Models of fiscal policy will yield more accurate results if they include the effects of institutional and political factors, which became more important for fiscal policy formulation since 1975.

Models

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Government consumption and private investment in closed and open economies

Article Abstract:

Government fiscal policy is analyzed using a closed-economy model instead of the usual equilibrium approach. The results of the equilibrium approach arise only under restrictive assumptions. The results of the closed-economy model show its defects. The study also extends its analysis to the open economy. The conventional view that fiscal expansions, whether fixed or temporary, crowd-in investments is invalidated by the study.

Case studies, Consumption (Economics), Equilibrium (Economics)

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A permanent income model of public consumption

Article Abstract:

A permanent income model related to government consumption is found to be inefficient in explaining the attitude of US fiscal spending. The model's claim that the government optimizes the welfare subject of representative consumers to its permanent income constraint is unproven based on validation tests conducted. Public consumption is shown to be highly reactive to lagged public income and smooth to permanent public income.

Economics, Research and Development in the Social Sciences and Humanities, Expenditures, Public, Public expenditures

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