Sawyer, M and Passarella, MV orcid.org/0000-0001-7652-5952 (2021) A Comprehensive Comparison of Fiscal and Monetary Policies: A Comparative Dynamics Approach. Structural Change and Economic Dynamics, 59. pp. 384-404. ISSN 0954-349X
Abstract
The purpose of the paper is to provide a comprehensive comparison of fiscal and monetary policies with different forms of public expenditure, including a job guarantee (JG) plan. Our key findings are as follows. First, expansionary fiscal policies (including JG) are effective in reflating the economy independently of the way in which they are funded. However, deficit monetization should be expected to be more effective in the short run, while bill-funded government spending is likely to be more effective in the long run. Second, expansionary monetary policies are reflationary in the short run. However, they may have deflationary effects on the economy in the medium to long run. Third, a lower reserve requirement can reflate the economy, but the expected impact is rather weak. Fourth, non-selective tax cuts are effective, but less effective than government spending. Fifth, the impact on the price level is harder to predict than the impact on output. Sixth, conventional spending outclasses JG in terms of GDP growth and inflation rate control, but the JG is a better option in terms of employment results and income distribution.
Metadata
Item Type: | Article |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © 2021 Elsevier B.V. All rights reserved. This is an author produced version of an article published in Structural Change and Economic Dynamics. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Stock-Flow Consistent Models; Job Guarantee Plan; Fiscal Policy; Monetary Policy |
Dates: |
|
Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Economics Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 01 Oct 2021 12:30 |
Last Modified: | 18 Nov 2024 15:27 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.strueco.2021.08.009 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:178560 |