The fiscal arithmetic of a slowdown in trend growth

IF 2.8 2区 经济学 Q1 ECONOMICS
Mariano Kulish , Nadine Yamout
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引用次数: 0

Abstract

We study the fiscal policy implications of a slowdown in trend growth using an estimated stochastic growth model. Our analysis underscores the risks associated with fiscal rules linked to growth rates, which may prove unsustainable under permanent shifts in productivity growth. For equilibria to exist, fiscal policy must respond to the slowdown ensuring that the government budget constraint holds in the low growth regime. While the slowdown imposes significant welfare costs on households, it also triggers a substantial endogenous response that boosts capital accumulation and functions as an automatic stabilizer. If fiscal policy maintains the provision of public goods per capita constant, the slowdown gives rise to a pleasant fiscal arithmetic, requiring tax cuts or a higher target debt-to-output ratio for long-term fiscal sustainability. We discuss the ramifications of various fiscal strategies, including increasing per capita public spending, altering the tax structure, and adjusting the target debt-to-output ratio.

趋势性增长放缓的财政计算
我们利用一个估计的随机增长模型研究了趋势增长放缓对财政政策的影响。我们的分析强调了与增长率挂钩的财政规则所带来的风险,在生产率增长发生永久性变化的情况下,这些规则可能证明是不可持续的。要实现均衡,财政政策必须对经济放缓做出反应,确保政府预算约束在低增长体制下成立。虽然经济放缓会给家庭带来巨大的福利成本,但同时也会引发大量的内生反应,促进资本积累并发挥自动稳定器的作用。如果财政政策保持人均公共产品供给不变,经济放缓就会带来令人愉悦的财政算术,要求减税或提高目标债务产出比,以实现财政的长期可持续性。我们讨论了各种财政策略的影响,包括增加人均公共支出、改变税收结构和调整目标债务产出比。
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来源期刊
CiteScore
4.70
自引率
3.60%
发文量
170
期刊介绍: The European Economic Review (EER) started publishing in 1969 as the first research journal specifically aiming to contribute to the development and application of economics as a science in Europe. As a broad-based professional and international journal, the EER welcomes submissions of applied and theoretical research papers in all fields of economics. The aim of the EER is to contribute to the development of the science of economics and its applications, as well as to improve communication between academic researchers, teachers and policy makers across the European continent and beyond.
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