| Business Cycles and Macroeconomic Stability: Should We Rebuild Built-In Stabilizers? 1997 Edition Contributor(s): Hairault, Jean-Olivier (Editor), Hénin, Pierre-Yves (Editor), Portier, Franck (Editor) |
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ISBN: 0792399072 ISBN-13: 9780792399070 Publisher: Springer OUR PRICE: $208.99 Product Type: Hardcover - Other Formats Published: April 1997 Annotation: The future of built-in stabilizers is currently a matter of concern due to the various challenges arising from the processes of fiscal consolidation, international integration and the reflux from the welfare state. The book gathers relevant material for assessing the issue from both theoretical and empirical research. This volume describes the stabilization properties of fiscal policies on business cycles and growth within dynamic equilibrium models. It also gives attention to automatic stabilization within an Economic Union. Both the loss of control over monetary policy and the restraints on the use of fiscal policy for countries entering the EMU are sources of concern about the possibilities of stabilizing fluctuations affecting the members of the Union. Furthermore, attention is given to stabilization and labour market policies. The contribution of labor market institutions to automatic stabilizers is often advocated. Post World War II institutions have brought protection to employment, wages and unemployed substitution revenues which involve stabilization of actual income. Recent institutional changes towards more labor market flexibility, mainly motivated by efficiency purposes, may be costly in terms of stabilization. The final part is on empirical evidence, recent trends and problems in stabilization. It is devoted to empirical studies of the stabilization effect of alternative fiscal policies, emphasizing the experience of European countries in the 1990s. |
| Additional Information |
| BISAC Categories: - Business & Economics | Economics - Microeconomics - Business & Economics | Economics - Macroeconomics - Business & Economics | Public Finance |
| Dewey: 336 |
| LCCN: 97011348 |
| Physical Information: 0.88" H x 6.14" W x 9.21" (1.53 lbs) 341 pages |
| Descriptions, Reviews, Etc. |
| Publisher Description: Setting the issue "Most economists consider the marked increase in automatic stabilizers a highly favorable development with respect to maintenance of economic stability". Besides the rare privilege of having being signed by both Milton Friedman and Paul Samuelson (Depres, Friedman, Hart, Samuelson, and Wallace 1950]), among others, this sentence expressed as soon as 1950 the consensus view on the stabilizing effect of fiscal rules governing tax revenue and public expendi- tures and transfers. This positive ex ante assessment will have been confirmed ex post as part of the explanation for post war stabilization (Burns 1960], de Long and Summers 1986], Moore and Zarnovitz 1986]). However, it becomes disputed in both its positive and normative aspects. Many institutional changes since the eighties point at curbing back the transfer mechanisms underlying automatic stabilizers, and legal restraints on deficits such as the US balanced budget amendment or the European Maastricht criteria would involve serious risks for the future of stabilizers. Under such rules "the government would become, almost inevitally, a destabilizer rather than a stabilizer" said Joseph Stiglitz, quoted by the New York Times (April 1995)). "Built-in stabilizers are automatic fiscal adjustments that reduce the national income multiplier and thus cushion the effects of changes in autonomous spend- ing on the level of income" (Pechman 1987]). Early analyses of the automatic fiscal stabilizers include the contributions of A. G. Hart 1945], R. Musgrave and M. Miller (1948) and E. C. Brown (1955). |