Economics 104 lecture notes fall 2014 introduction scarcity and choice. Fiscal notes provide the legislature with estimates of the financial impacts of proposed legislation and are an importantbut sometimes controversialpart of the legislative process. The net export effect reduces effectiveness of fiscal policy. Intoduction to public finance and taxation theory public finance is the term, which has traditionally been used or applied to the packages of those policy problems, which involve the use of tax. In fact, it was keynes who popularized this great instrument of macroeconomic policy during the 1930s depression. A contemporary application of theory and policy, thomson, 2005. Fiscal policy in the rbc model eric sims university of notre dame spring 2015 1 introduction this set of notes studies scal policy in the rbc model. The fiscalnote platform brings together global data, inhouse policy reporting and analysis, and tools to support your advocacy, stakeholder. A fiscal note is a written estimate of the costs, savings, revenue gain, or revenue loss that may result from implementation of requirements in a bill or joint resolution. For years now, the texas legislature has worked with the texas department of public safety, which. An expression like er2 i means the expected value of r 2 i similar to e. To potential output, or to increase potential output. The mundellfleming model an open economy version of the islm model. The two main instruments of fiscal policy are, thus, government expenditure and revenue taxation.
Fiscal policy refers to government spending and nance. Another example of a shift in the expenditure line. Fiscal stimulus increases the budget deficit and public debt, and sims notes that if the. Federal government policy on taxes, spending, and borrowing that is designed to influence business fluctuations 2. For example, expansionary fiscal policy may affect interest rates, which can cause the dollar to appreciate and exports to decline or rise. Hilary hoynes introduction uc davis, winter 20 1 20. Among the most important is the recognition that fiscal and monetary policies are linked through the government sectors budget constraint. Fiscal policy refers to government policy that attempts to influence the direction of the economy through changes in government taxes or through some spending. They are rather intended to serve as a roadmap for the course mat519 and are largely based on the very good books of williams wil06 and lambertonlapeyre. Always go over the chapters and class notes regularly. The multiplier effect states that every one dollar change in fiscal policy creates a change much greater than one dollar in the national income. For each y,p0, the utility value of the utility maximization problem is denoted as y,p.
Thates why gin order to understand fiscal policy gwe need. Lecture notes public economics i mit opencourseware. I they can spend in excess of tax revenue today running up debt i provided they will be able to pay back their debt in the future thanks to tax revenues in excess of. Fiscal policy is a macroeconomic stabilization policy, which attempts to stabilize the economy or eliminate output gaps. More than 2 million texas households dont have highspeed internet and our states vast rural areas are especially underserved. When discussing fiscal policy we must start by recognizing. Pls 308 public administration lecture notes imperial 3. In other words, the effects of changes in fiscal policy are multiplied. Note that a generally different approach was taken by the tax. Fiscal policy may affect aggregate supply as well as demand see figure 12.
A free powerpoint ppt presentation displayed as a flash slide show on id. Coordination and distinction between monetary and fiscal policies. These lecture notes are very introductory by nature, and quite plain vanilla. Students can refer to economics a singapore perspective for the diagrams. Chapter 14 the cost of capital texas tech university. Investment pierreolivier gourinchas uc berkeley fall 2014 c pierreolivier gourinchas, 2014, all rights reserved. Fiscal policy is the use of government expenditure and revenue collection taxation to influence the economy. Title microsoft powerpoint chapter14titmancost of capital. Lowering t today means higher t in the future so that the present value of tax revenues does not change i. In the rst part, we will examine the macroeconomic e ects of scal policy, for instance, the size of multipliers.
Fiscal policy that increases aggregate demand directly through an increase in government spending is typically called expansionary or loose. Source of information the great depression in wickipediafirst five year plan of the ussr in 1928, which was the first attemptin the economic history of the world to coordinate the economic andbudget policies at the macro level with a view to expedite the rate ofeconomic growth. To move to a new equilibrium, fiscal policy needs to accommodate o fiscal policy figures 153 and 154. Besides providing goods and services, fiscal policy objectives vary. These notes are riddled with inconsistencies, typos and omissions. Fiscal policy lecture notes fiscal policy keynesian. A calculation that finds the optimal income tax in a simple model. The budgeting process is shared between executive and legislative branches of government which creates a strong political dynamic within the process. This section provides lectures notes for selected course topics. Seven deadly innocent frauds of economic policy warren mosler pdf lecture from w.
In economics and political science, fiscal policy is the use of government revenue collection. Monetary policy objective of controlling of money supply gets compromised. The lefthand side will be covered in corporate finance 2. Asset pricing slide 15 desynchronize over states ctd. Public finance and acca association of chartered certified accountants the acca exams are divided into two levels. Fiscal policy is the attempt by the government to deliberately manipulate its budget position with a goal of stabilizing prices, promoting growth, and minimizing unemployment. Due to the large amount of material covering the subject, these notes do not intend to be complete in any way. Public fincance vi semester core course ba economics 2011 admission university of calicut school of distance education calicut. Macroeconomic policies will be covered in economics tuition in the first, second, third and fourth weeks of term 2. Click on the respective units to download the sample copies for quality confirmation. Public finance and fiscal policy levy economics institute. Econ 311 lecture notes 1 metropolitan state university.
Fiscal policy and public finance spring 2010 syllabus and outline subject to change instructor. Trust funds are separate accounts from a governments general fund off budget. The goals of macroeconomic policy macroeconomic policy o monetary policy. Monetary theory and policy notes miami business school. Variations in the inflation rate can have implications for the fiscal authoritys. The restrictions on monetary policy due to uma mechanisms disappear from the ftpl only in the limit when. Download cpa notes and revision kits download kasneb cpa notes new syllabus here. Fiscal policy lecture notes with supplementary notes free download as pdf file. Public finance and taxation archives kasneb cpacifaatd. Goods are defined by date and state contingent securities dollar payoff if it rains at 3. Lecture notes in finance 1 miqef, msc course at unisg. Macroeconomics of fiscal policy pedro gomes the objective of the course is to introduce the students to the study of scal policy and some of the ongoing academic debates. This digital divide has serious implications for education, telemedicine, agriculture and small business.
Governmental activities before the great depression of the 1930s were minimal and, hence, the role of fiscal policy was extremely limited. As debt as a percentage of gdp rises, the likelihood of default on the debt increases, leading to lenders demanding higher and higher interest rates for loans to the government. Fiscal policy lecture notes with supplementary notes scribd. Central bank autonomy and delinking of monetary and fiscal policy is the important aspect of reform in debt management practices. In a hyperconnected, datasaturated world, fiscalnote provides intel that empowers your organization to be proactive not reactive when it comes to navigating the uncertainty of the outside world. Up until world war i there was pattern of running up debt to finance a war, but then run the debtgdp ratio down close to zero after a war. Lecture notes can be downloaded from the course website on moodle. The text for the course is public finance and public policy by jonathan gruber, second edition, worth publishers 2007.
I they can spend in excess of tax revenue today running up debt i provided they will be able to pay back their debt in the future thanks to tax revenues in. Notes on seigniorage and the fiscal theory of the price level price level is determined by the ftpl. For the love of physics walter lewin may 16, 2011 duration. The book is available in the major bookstores in singapore. The intertemporal dimension of fiscal policy i when discussing fiscal policy we must start by recognizing that countries and governments are in for the long term i they dont need to balance their books yearbyyear. If gov provides free health care to uninsured, some privately insured will drop insurance and bene. To receive study notes directly to your email,calltextwhatsapp 0724 962 477. Name two things the government could do if it wants to implement expansionary fiscal policy.