Fiscal policy
New US tax plan promising for growth – Fed minutes
FOMC members revise the growth outlook upwards for next 12 months, as tax cuts promise to provide “some boost” to consumer spending
Public spending cuts have bigger multiplier than fiscal stimulus – paper
Research weakens case for expansionary policies, say authors
Credit no longer supporting Chinese growth – research
China’s economy has become “saturated with credit”, argues IMF research paper, with fiscal stimulus primarily boosting manufacturing
India needs radical reforms, says academic
State ownership has gone too far but the state needs stronger capabilities in other areas, argues Vijay Joshi
UK debt could be a stability risk, says BoE’s Sharp
FPC member goes against advice for central bankers to “stick to their knitting” and discusses how fiscal policy could impact BoE’s financial stability work
Kuwait could create financial stability committee – IMF
The central bank could strengthen supervision by creating a new committee, say IMF staff; the country is weathering oil shocks well
Central Bank of Barbados governor ‘concerned’ about level of reserves
Barbados central bank tweaks securities requirement ratio amid foreign exchange shortage; less than 10 weeks of import coverage remain
Too soon to start celebrating economic improvements, says Mminele
Sarb deputy warns against complacency in latest economic roundup, saying it is too soon to start celebrating lower inflation and a more stable external environment
Fiscal policy shocks amplified by accommodative monetary policy – paper
IMF research analyses impact of government spending spillovers, noting effects are amplified in countries with interest rates near the lower bound
Blanchard and Summers call for rethink of stabilisation policy
Both economists question consensus on fiscal prudence and advocate stricter financial regulation
Danish central bank critical of fiscal easing plans
As growth accelerates and inflation rises the economy risks overheating, the central bank says
Legal independence ‘not 100% insurance’, warns Posen
Academic says central banks have to look at the political context when policymaking, while senior figures say it is the responsibility of central banks to speak out
Danish central bank advises Faroese public spending cuts
Higher salmon prices and low unemployment may overheat the economy, the central bank says
IMF’s Lagarde gives update on women’s empowerment pledges
The fund has teamed up with the UK to provide ‘gender-budgeting’ assistance to countries requesting financial management support
Denmark central bank issues warning as economy heats up
The National Bank of Denmark cautions the labour market is tight and the economy may be close to overheating
Housing reform ‘will stabilise’ market – Danish central bank
The new taxation system aims to reduce price volatility by 20% and stem rising house prices in cities
Multiplier of spending cuts bigger than fiscal expansions, paper argues
Impact of austerity is at its peak during recessions, Richmond Federal Reserve paper finds
Fiscal stabilisation spurs growth in low fixed-asset sectors - IMF
Those with difficulty raising external funds benefit most from policy, paper argues
Archive – Interview: Allan Meltzer
Robert Pringle talks to Allan Meltzer, Carnegie Mellon professor and chair of the US Congress’s International Financial Institution Advisory Commission (the “Meltzer Commission”); first published in February 2003
Book notes: The Limits of the Market, by Paul de Grauwe
De Grauwe has produced a concise analysis into how markets and governments react with one another; but his lack of familiarity with the history of economic thought is surprising
Bank of Colombia paper charts fiscal multipliers in developing countries
Stronger fiscal-monetary co-ordination in developing economies during periods of expansion would extract more value from stimulus; fiscal multipliers higher in fixed exchange rate regimes
Turkish inflation begins to fall amid economic strength
Inflation fell back to single digits in July for the first time since January; economy buoyant amid stimulus measures in wake of failed coup
Tax cuts should focus on income from capital, French paper argues
Cutting taxation on labour is less effective in boosting growth, researchers say
US taxes low by global standards, say Chicago Fed economists
Overall burden of taxes is low by OECD standards, and taxes on capital income are notably lower than in Germany, economists say