Fiscal Policy and Economic Stability: Does PIGS stand for Procyclicality In Government Spending?

The Financial Crisis has hit particularly hard countries like Ireland or Spain. Procyclical fiscal policy has contributed to a boom-bust cycle that undermined fiscal positions and deepened current account deficits during the boom. We set up an RBC model of a small open economy, following Mendoza (1991), and introduce the effect of fiscal policy decisions that change over the cycle. We calibrate the model on data for Ireland, and simulate the effect of different spending policies in response to supply shocks. Procyclical fiscal policy distorts intertemporal allocation decisions. Temporary spending boosts in booms spur investment, and hence the need for external finance, and so generates very volatile cycles in investment and the current account. This economic instability is also harmful for the steady state level of output. Our model is able to replicate the relation between the degree of cyclicality of fiscal policy, and the volatility of consumption, investment and the current account observed in OECD countries.

Self-reported sitting time and physical activity: interactive associations with mental well-being and productivity in office employees

Background: Little is known about how sitting time, alone or in combination with markers of physical activity (PA), influences mental well-being and work productivity. Given the need to develop workplace PA interventions that target employees' health related efficiency outcomes; this study examined the associations between self-reported sitting time, PA, mental well-being and work productivity in office employees. Methods: Descriptive cross-sectional study. Spanish university office employees (n = 557) completed a survey measuring socio-demographics, total and domain specific (work and travel) self-reported sitting time, PA (International Physical Activity Questionnaire short version), mental well-being (Warwick-Edinburg Mental Well-Being Scale) and work productivity (Work Limitations Questionnaire). Multivariate linear regression analyses determined associations between the main variables adjusted for gender, age, body mass index and occupation. PA levels (low, moderate and high) were introduced into the model to examine interactive associations. Results: Higher volumes of PA were related to higher mental well-being, work productivity and spending less time sitting at work, throughout the working day and travelling during the week, including the weekends (p < 0.05). Greater levels of sitting during weekends was associated with lower mental well-being (p < 0.05). Similarly, more sitting while travelling at weekends was linked to lower work productivity (p < 0.05). In highly active employees, higher sitting times on work days and occupational sitting were associated with decreased mental well-being (p < 0.05). Higher sitting times while travelling on weekend days was also linked to lower work productivity in the highly active (p < 0.05). No significant associations were observed in low active employees. Conclusions: Employees' PA levels exerts different influences on the associations between sitting time, mental well-being and work productivity. The specific associations and the broad sweep of evidence in the current study suggest that workplace PA strategies to improve the mental well-being and productivity of all employees should focus on reducing sitting time alongside efforts to increase PA.