CH07FISCAL POLICY打印稿

CH07FISCALPOLICY Referstochangesingovernmentexpendituresand ortaxestoachieveparticulareconomicgoals suchaslowunemployment pricestability andeconomicgrowth Governmentexpendituresisthesumofgovernmentpurchasesandtransferpayments FISCALPOLICY FISCALPOLICY Fiscalpolicyinfluencessaving investment andgrowthinthelongrun Intheshortrun fiscalpolicyprimarilyaffectstheaggregatedemand Whenpolicymakerschangethemoneysupplyortaxes theeffectonaggregatedemandisindirect throughthespendingdecisionsoffirmsorhouseholds Whenthegovernmentaltersitsownpurchasesofgoodsorservices itshiftstheaggregate demandcurvedirectly ChangesinGovernmentPurchases Therearetwomacroeconomiceffectsfromthechangeingovernmentpurchases ThemultipliereffectThecrowding outeffect TheMultiplierEffect Governmentpurchasesaresaidtohaveamultipliereffectonaggregatedemand Eachdollarspentbythegovernmentcanraisetheaggregatedemandforgoodsandservicesbymorethanadollar Themultipliereffectreferstotheadditionalshiftsinaggregatedemandthatresultwhenexpansionaryfiscalpolicyincreasesincomeandtherebyincreasesconsumerspending TheMultiplierEffect Quantityof Output Price Level 0 Copyright 2004South Western AFormulafortheSpendingMultiplier Theformulaforthemultiplieris Multiplier 1 1 MPC IftheMPCis3 4 thenthemultiplierwillbe Multiplier 1 1 3 4 4Inthiscase a 20billionincreaseingovernmentspendinggenerates 80billionofincreaseddemandforgoodsandservices TheCrowding OutEffect Fiscalpolicymaynotaffecttheeconomyasstronglyaspredictedbythemultiplier Anincreaseingovernmentpurchasescausestheinterestratetorise Ahigherinterestratereducesinvestmentspending Thisreductionindemandthatresultswhenafiscalexpansionraisestheinterestrateiscalledthecrowding outeffect Thecrowding outeffecttendstodampentheeffectsoffiscalpolicyonaggregatedemand TheCrowding OutEffect Quantity ofMoney Quantityfixed bytheFed 0 Interest Rate Moneydemand MD Money supply a TheMoneyMarket Quantity ofOutput 0 Price Level Aggregatedemand AD1 b TheShiftinAggregateDemand Copyright 2004South Western ChangesinTaxes Whenthegovernmentcutspersonalincometaxes itincreaseshouseholds take homepay Householdssavesomeofthisadditionalincome Householdsalsospendsomeofitonconsumergoods Increasedhouseholdspendingshiftstheaggregate demandcurvetotheright AutomaticStabilizers Automaticstabilizersarechangesinfiscalpolicythatstimulateaggregatedemandwhentheeconomygoesintoarecessionwithoutpolicymakershavingtotakeanydeliberateaction Automaticstabilizersincludethetaxsystemandsomeformsofgovernmentspending Examples incometaxunemploymentinsurancewelfare DiscretionaryFiscalPolicy DiscretionaryFiscalPolicyisdeliberatechangesofgovernmentexpendituresand ortaxestoachieveparticulareconomicgoals AutomaticFiscalPolicyischangesingovernmentexpendituresand ortaxesthatoccurautomaticallywithout additional congressionalaction DiscretionaryFiscalPolicy Expansionaryfiscalpolicyreferstoincreasesingovernmentexpendituresand ordecreasesintaxestoachievemacroeconomicgoals Contractionaryfiscalpolicyattemptstodecreasegovernmentexpendituresand orincreasesintaxestoachievemacroeconomicgoals FiscalPolicyandFullEmployment P1 Y1 P RealGDP Duringarecession thegovernmentcanstimulatetheeconomybyincreasinggovernmentspendingordecreasingtaxes AD1 AD2 Yp LRAS SRAS P2 FiscalPolicyandPriceStability P2 Yp P RealGDP Duringaninflationaryperiod thegovernmentcancontracttheeconomybydecreasinggovernmentspendingorincreasingtaxes AD2 AD1 Y1 LRAS SRAS P1 TwoKeyAssumptions Inourdiscussionoffiscalpolicy weonlydealwithdiscretionaryfiscalpolicy Weassumethatanychangeingovernmentspendingisduetoachangeingovernmentpurchasesandnottoachangeintransferpayments Demand SideFiscalPolicy Achangeinconsumption investment governmentpurchases ornetexportscanchangeaggregatedemandandthereforeshifttheADcurve Achangeintaxescanaffectconsumptionorinvestmentorbothandthereforcanaffectaggregatedemand FactorsThatChangeAggregateDemand FiscalPolicy AKeynesianPerspective KeynesianTheory CrowdingOut InKeynesiantheory expansionaryfiscalpolicyshiftstheaggregatedemandcurvetoAD2andmovestheeconomytopoint2 Ifthereisnocrowdingout expansionaryfiscalpolicyincreasesRealGDPandlowerstheunemploymentrate Ifthereisincompletecrowdingout expansionaryfiscalpolicyincreasesRealGDPandlowerstheunemploymentrate butnotasmuchasinthecaseofzerocrowdingout Ifthereiscompletecrowdingout expansionaryfiscalpolicyhasnoeffectontheeconomy TheNewClassicalViewofFiscalPolicy CrowdingOutwithNoIncreaseinInterestRates Individualsrespondtoexpansionaryfiscalpolicy alargerdeficit andgreaterdeficit financingrequirementsbythinkingthefollowing Alargerdeficitimpliesmoredebtthisyearandhigherfuturetaxes I llsimplysavemoreinthepresentsoIcanpaythehigherfuturetaxesrequiredtopayinterestandtorepayprincipalonthenewdebt But ofcourse ifI mgoingtosavemore I llhavetoconsumeless Currentconsumptionwillfallasaresultofexpansionaryfiscalpolicy Deficitsdonotbringhigherinterestrates LagsAndFiscalPolicy TheDataLagTheWait And SeeLagTheLegislativeLagTheTransmissionLagTheEffectivenessLagSomeeconomistsarguethatdiscretionaryfiscalpolicyisnotlikelytohavetheimpactontheeconomythatpolicymakershope Bythetimethefullimpactofthepolicyisfelt theeconomicproblemitwasdesignedtosolvemaynolongerexist maynotexisttothedegreeitoncedid oritmayhavechangedaltogether LagsAndFiscalPolicy Demand SideFiscalPolicy ReturntotheKeynesianModel Itwouldseemthatundertheconditionsofnolagsandzerocrowdingout expansionaryfiscalpolicy eitherincreasinggovernmentspendingorcuttingtaxes willworkatremovingtheeconomyfromarecessionarygap Demand SideFiscalPolicy ReturntotheKeynesianModel IfgovernmentknowsthedifferencebetweenQ1andQN sothatitknowshowmuchtochangeRealGDP anditknowstheMPC thenitcanusefiscalpolicytogettheeconomyoutofarecessionarygapandproducingNaturalRealGDP Demand SideFiscalPolicy ReturntotheKeynesianModel Ifthegovernmentdoesn tknowtheactualMPCanditdoesn tknowtheactualdifferencebetweenQ1andQN thenfiscalpolicyisn tlikelytoworkasintended Supply SideFiscalPolicy Allotherthingsheldconstant lowermarginaltaxratesincreasetheincentivetoengageinproductiveactivitiesrelativetoleisureandtaxavoidanceactivities MarginalTaxRate Taxpayment TaxableIncome Givenacutinmarginaltaxratestwothingswillhappen Individualswillhavemoredisposableincome theamountofmoneytheycanearnbyworkingincreases Intheanalysisofmarginaltaxratesandaggregatesupply weimplicitlyassumethatintheaggregate amarginaltaxratecutincreasesworkactivity ThePredictedEffectofaPermanentMarginalTaxRateCutonAggregateSupply TheLafferCurve TaxRatesandTaxReturns Ifincometaxrateswerelowered woulditincreaseordecreasetaxrevenue Therearetwotaxratesatwhichzerotaxrevenueswillbecollected 0and100 Anin