Fiscal Multipliers in War and in Peace
نویسنده
چکیده
Proponents of fiscal stimulus argue that government spending is needed to replace the private spending normally lost during a recession. Estimates of the so-called fiscal multiplier based on wartime episodes are used to support the proposition that a peacetime intervention can “stimulate” the economy in a desirable manner. The author argues that a wartime crisis is fundamentally different from a peacetime economic crisis. What may be desirable in war is not necessarily so in peace. This is demonstrated formally in the context of a simple neoclassical model, which delivers fiscal multipliers consistent with the wartime evidence. The optimal fiscal policy, whether it entails expansion or contraction, is independent of the size of the fiscal multiplier. (JEL E6, E62)
منابع مشابه
At the Expense of the Country: Multi-level War Economy in Afghanistan and the Implication for Peace
متن کامل
Discussion Paper No . 2001 / 57 Debt Relief and Civil War
Of the 41 HIPCs, 11 are classified by the IMF and World Bank as conflict-affected. Can debt relief reduce the level of violent conflict in these countries? By providing additional resources to finance broad-based public spending, debt relief could help to redress the grievances that contribute to conflict. It could also reduce the ability of those motivated by greed to recruit followers, since ...
متن کاملWar, Peace, and Cinema: Excerpts from the Foreign Policy of the USA with a Look at Stanley Kubrick’s Cinema
The notion of peace, regardless of theorizations accepted in th field and since the Enlightenment Period, and the era known as Modernism, has, constantly, been one of the challenges of mankind, and also scientists in the field of political sciences and international relations. Contrary to the presentation of the idea of peace and respect to the human rights in some of the fore...
متن کاملNew Media and Peacemaking Diplomacy
A life full of peace has always been a dream for human societies. Peace is still considered as one of the main modern world concerns, because each nation deals with its own kind of violence and war. Therefore, peacemaking has turned into one of the governments’ objectives. Peace has been affected by various factors in all over history. Media and communication technologies are two of the factors...
متن کاملMacroeconomic Effects of the War in Mozambique
The aim of this paper is to analyse some macroeconomic channels operating in a war economy. At the theoretical level, the effects of such war on the key economic variables capital, technology, uncertainty, and the government’s fiscal deficit are discussed before proceeding to the analysis of individuals, firms and the government. These elements are combined in a dynamic macroeconomic model to s...
متن کامل