Balanced-budget consumption taxes and aggregate stability in a small open economy

In a small open economy facing a perfect world capital market, this paper shows that if the government follows a balanced-budget fiscal policy based on endogenous consumption tax rates, then the steady state is saddle-path stable and hence beliefs-driven aggregate instability can be ruled out. This result is in contrast to those obtained in some closed economy models, and it suggests that unrestricted world capital mobility can help stabilize the economy under the balanced-budget fiscal policy based on consumption taxation.

Proposed balanced budget constitutional amendments [microform] : hearings before the Subcommittee on Monopolies and Commercial Law of the Committee on the Judiciary, House of Representatives, One Hundredth Congress, first session ... October 15, November 17, and November 18, 1987.

"Serial no. 85."

Budget reductions for FY 1986 : Balanced Budget and Emergency Deficit Control Act of 1985 : report to the President and Congress /

"B-221498"--P. 1.

Balanced budget requirements : state experiences and implications for the federal government : briefing report to the Chairman, Committee on the Budget, House of Representatives /

148877GAO (202) 512-6000 (Voice); (301) 258-4066 (Fax)

Focal points and fiscal discipline. ACES Cases No. 2013.2

Many studies suggest that balanced budget rules can restrain sovereign debt and lower sovereign borrowing costs, even if those rules are never enforced in court. Typically, this is explained as a result of a legal deterrence logic, in which the threat of judicial enforcement deters sovereigns from violating the rules. By contrast, we argue that balanced budget rules work by coordinating decentralized punishment of sovereigns by bond markets, rather than by posing a credible threat of judicial enforcement. Therefore, the clarity of the focal point provided by the rule, rather than the strength of its judicial enforcement mechanisms, determines its effectiveness. We develop a formal model that captures the logic of our argument, and we assess this model using data on US states. We then consider implications of our argument for the impact of the balanced budget rules recently imposed on eurozone states in the Fiscal Compact Treaty.

Rules and mechanics

So far in this book, we have seen a large number of methods for generating content for existing games. So, if you have a game already, you could now generate many things for it: maps, levels, terrain, vegetation, weapons, dungeons, racing tracks. But what if you don’t already have a game, and want to generate the game itself? What would you generate, and how? At the heart of any game are its rules. This chapter will discuss representations for game rules of different kinds, along with methods to generate them, and evaluation functions and constraints that help us judge complete games rather than just isolated content artefacts. Our main focus here will be on methods for generating interesting, fun, and/or balanced game rules. However, an important perspective that will permeate the chapter is that game rule encodings and evaluation functions can encode game design expertise and style, and thus help us understand game design. By formalising aspects of the game rules, we define a space of possible rules more precisely than could be done through writing about rules in qualitative terms; and by choosing which aspects of the rules to formalise, we define what aspects of the game are interesting to explore and introduce variation in. In this way, each game generator can be thought of an executable micro-theory of game design, though often a simplified, and sometimes even a caricatured one

(Minimally) 'epsilon'-incentive compatible competitive equilibria in economies with indivisibilities

We consider competitive and budget-balanced allocation rules for problems where a number of indivisible objects and a fixed amount of money is allocated among a group of agents. In 'small' economies, we identify under classical preferences each agent's maximal gain from manipulation. Using this result we find the competitive and budget-balanced allocation rules which are minimally manipulable for each preference profile in terms of any agent's maximal gain. If preferences are quasi-linear, then we can find a competitive and budget-balanced allocation rule such that for any problem, the maximal utility gain from manipulation is equalized among all agents.

A budget for Europe's Monetary Union. Bruegel Policy Contribution 2012/22, December 2012

In a monetary union, national fiscal deficits are of limited help to counteract deep recessions; union-wide support is needed. A common euro-area budget (1) should provide a temporary but significant transfer of resources in case of large regional shocks, (2) would be an instrument to counteract severe recessions in the area as a whole, and (3) would ensure financial stability. The four main options for stabilisation of regional shocks to the euro area are: unemployment insurance, payments related to deviations of output from potential, the narrowing of large spreads, and discretionary spending. The common resource would need to be well-designed to be distributionally neutral, avoid free-riding behaviour and foster structural change while be of sufficient size to have an impact. Linking budget support to large deviations of output from potential appears to be the best option. A borrowing capacity equipped with a structural balanced budget rule could address area-wide shocks. It could serve as the fiscal backstop to the bank resolution authority. Resources amounting to 2 percent of euro-area GDP would be needed for stabilisation policy and financial stability.

Fiscal stringency and fiscal sustainability : panel evidence from the American state and local governments

Most state (and local) governments in the U.S. operate under formal fiscal rules which limit their ability to run budget deficits and resort to debt financing. A priori, one would expect to find evidence in favor of an intertemporally balanced budget, or fiscal sustainability, for these states, especially those characterized by a relatively high degree of fiscal stringency. We test this hypothesis for a panel of 47 state–local government units (1961–2006) using four budget balance definitions and several subsamples defined based on regional classifications, or presence of certain balanced budget requirements (BBRs). Our results, obtained from panel estimation techniques that allow for general forms of serial and cross-sectional dependence, suggest that a sufficient condition for “strong” sustainability is consistently satisfied for the full sample and all subsamples in relation to balances that include special funds and/or federal grants. However, we find evidence consistent with the “weak” version of sustainability for the full sample and some regional subsamples (particularly Far West dominated by California) in at least one of the two balances that exclude these items. Finally, the BBRs seem to matter only in relation to the sustainability of the more narrowly defined balances. We discuss the implications of these findings for the role of fiscal rules and federal grant policies.

The Congressional Budget Process and the Aggregate Level of Spending

This paper analyzes whether the Congressional budget process (instituted in 1974) leads to lower aggregate spending than does the piece-meal appropriations process that preceded it. Previous theoretical analysis, using spatial models of legislator preferences, is inconclusive. This paper uses a model of interest group lobbying, where a legislature determines spending on a national public good and on subsidies to subsets of the population that belong to nationwide sector-specific interest groups. In the appropriations process, the Appropriations Committee proposes a budget, maximizing the joint welfare of voters and the interest groups, that leads to overspending on subsidies. In the budget process, a Budget Committee proposes an aggregate level of spending (the budget resolution); the Appropriations Committee then proposes a budget. If the lobby groups are not subject to a binding resource constraint, the two institutional structures lead to identical outcomes. With such a constraint, however, there is a free rider problem among the groups in lobbying the Budget Committee, as each group only obtains a small fraction of the benefits from increasing the aggregate budget. If the number of groups is sufficiently large, each takes the budget resolution as given, and lobbies only the Appropriations Committee. The main results are that aggregate spending is lower, and social welfare higher, under the budget process; however, provision of the public good is suboptimal. The paper also presents two extensions: the first endogenizes the enforcement of the budget resolution by incorporating the relevant procedural rules into the model. The second analyzes statutory budget rules that limit spending levels, but can be revised by a simple majority vote. In each case,the free rider problem prevents the groups from securing the required changes to procedural and budget rules.

Kormányközi szerződéssel a költségvetési stabilitásért? (Intergovernmental agreement for fiscal discipline?)

Az EU fiskális szabályai bevezetésük óta az akadémiai kutatások homlokterében állnak. A nemzeti szintű fiskális szabályok vizsgálata ugyanakkor egy jobbára negligált területe maradt a nemzetközi kutatásoknak. Az idén életbe lépett új költségvetési paktum éppen ezen nemzeti szintű, a költségvetés egyensúlyát előíró szabályok bevezetésétől várja a fiskális fegyelem meghonosítását az EU országaiban. A tanulmány megmutatja, hogy az olyan nemzeti szabályok, mint a német aranyszabály, nem tekinthetők a fiskális fegyelem egyedüli letéteményeseinek. Ezek ugyanis többnyire egy átfogó reformcsomag részei voltak csupán. Amire szükség van ezért, az egy átfogó és átgondolt államháztartási reform, valamint a szabályok nemzeti birtokbavétele. Az új paktumot is ezen pontokon volna szükséges erősíteni. ______ The scrutiny of EU fiscal rules such as the Maastricht criteria and the Stability and Growth Pact has become the focus of many scholarly works. The study of domestic fiscal rules, however, has remained a neglected part of research. The new Treaty on Stability, Cooperation and Governance (TSCG), however, makes the analysis of domestic fiscal rules highly relevant, since the treaty requires member states to adopt a balanced budget rule. The paper demonstrates that domestic rules such as the German golden rule were hardly the sole triggering factors of fiscal discipline; rather, they served as the key elements of a comprehensive reform package. Thus, the paper argues that without bold and comprehensive reforms of the general government on the one hand and national ownership on the other hand, no fiscal rule can be effective enough. The new TSCG should be strengthened, therefore, in this particular aspect.

A new approach to the design of electronic exchanges

Electronic Exchanges are double-sided marketplaces that allows multiple buyers to trade with multiple sellers, with aggregation of demand and supply across the bids to maximize the revenue in the market. In this paper, we propose a new design approach for an one-shot exchange that collects bids from buyers and sellers and clears the market at the end of the bidding period. The main principle of the approach is to decouple the allocation from pricing. It is well known that it is impossible for an exchange with voluntary participation to be efficient and budget-balanced. Budget-balance is a mandatory requirement for an exchange to operate in profit. Our approach is to allocate the trade to maximize the reported values of the agents. The pricing is posed as payoff determination problem that distributes the total payoff fairly to all agents with budget-balance imposed as a constraint. We devise an arbitration scheme by axiomatic approach to solve the payoff determination problem using the added-value concept of game theory.

Essay on secular stagnation

In this paper we show that a closed economy, with a balanced budget and unable to increase public spending, can avoid or leave a persistent slump through adequate and timely combination of monetary and fiscal policy based on distortionary taxation. We use a three generations OLG New Keynesian model in which a permanent slump is possible without any self-correcting force to full-employment. Complementing recent work on Secular Stagnation using lump-sum taxation and government spending as fiscal instruments, our contribution is to use distortionary taxes over labor, consumption and capital, in a balanced budget environment with constant (or decreasing) government spending.

Los conceptos de salud financiera, riesgo y epidemiología en los estados financieros de las compañías del sector de extracción de petróleo crudo y gas natural en Colombia

El presente proyecto tiene como objeto identificar cuáles son los conceptos de salud, enfermedad, epidemiología y riesgo aplicables a las empresas del sector de extracción de petróleo y gas natural en Colombia. Dado, el bajo nivel de predicción de los análisis financieros tradicionales y su insuficiencia, en términos de inversión y toma de decisiones a largo plazo, además de no considerar variables como el riesgo y las expectativas de futuro, surge la necesidad de abordar diferentes perspectivas y modelos integradores. Esta apreciación es pertinente dentro del sector de extracción de petróleo y gas natural, debido a la creciente inversión extranjera que ha reportado, US$2.862 millones en el 2010, cifra mayor a diez veces su valor en el año 2003. Así pues, se podrían desarrollar modelos multi-dimensional, con base en los conceptos de salud financiera, epidemiológicos y estadísticos. El termino de salud y su adopción en el sector empresarial, resulta útil y mantiene una coherencia conceptual, evidenciando una presencia de diferentes subsistemas o factores interactuantes e interconectados. Es necesario mencionar también, que un modelo multidimensional (multi-stage) debe tener en cuenta el riesgo y el análisis epidemiológico ha demostrado ser útil al momento de determinarlo e integrarlo en el sistema junto a otros conceptos, como la razón de riesgo y riesgo relativo. Esto se analizará mediante un estudio teórico-conceptual, que complementa un estudio previo, para contribuir al proyecto de finanzas corporativas de la línea de investigación en Gerencia.