Even in perfect competition there is a positive profit return if the good is produced with decreasing returns to scale technology. Using a two-periods overlapping generations (OLG) model with production under perfect competition with decreasing returns to scale technology in which the economy grows by technological progress and the older generation consumers receive the profit returns, we consider the problem of budget deficit under economic growth. We will show the following results. 1) We need a budget deficit to achieve full employment under constant price when the economy grows by technological progress. 2) If the budget deficit exceeds the level necessary to maintain full employment in a growing economy under constant price, inflation will be triggered. We need a stable budget deficit to prevent further inflation. 3) If the budget deficit is insufficient to maintain full employment, it will cause a recession with involuntary unemployment. We can overcome a recession and restore full employment caused by insufficient budget deficit by a budget deficit larger than the one necessary and sufficient to maintain full employment without a recession. We should not offset the deficit created to overcome the recession by subsequent surpluses because we can maintain full employment through constant budget deficits. Also, we show that in each case the budget deficit equals the difference between the net savings of the younger generation consumers and that of the older generation consumers.
{"title":"A Mathematical Model of MMT (Modern Monetary Theory) with Profit Return","authors":"Yasuhito Tanaka","doi":"10.2139/ssrn.3932713","DOIUrl":"https://doi.org/10.2139/ssrn.3932713","url":null,"abstract":"Even in perfect competition there is a positive profit return if the good is produced with decreasing returns to scale technology. Using a two-periods overlapping generations (OLG) model with production under perfect competition with decreasing returns to scale technology in which the economy grows by technological progress and the older generation consumers receive the profit returns, we consider the problem of budget deficit under economic growth. We will show the following results. 1) We need a budget deficit to achieve full employment under constant price when the economy grows by technological progress. 2) If the budget deficit exceeds the level necessary to maintain full employment in a growing economy under constant price, inflation will be triggered. We need a stable budget deficit to prevent further inflation. 3) If the budget deficit is insufficient to maintain full employment, it will cause a recession with involuntary unemployment. We can overcome a recession and restore full employment caused by insufficient budget deficit by a budget deficit larger than the one necessary and sufficient to maintain full employment without a recession. We should not offset the deficit created to overcome the recession by subsequent surpluses because we can maintain full employment through constant budget deficits. Also, we show that in each case the budget deficit equals the difference between the net savings of the younger generation consumers and that of the older generation consumers.","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133439798","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I. Arlashkin, Natalya Barbashiova, S. Belev, A. Deryugin, E. Leonov, I. Sokolov, T. Tischenko
The budget system revenues of the Russian Federation in 2020 shrank by Rb3.4 trillion in real terms compared to the previous year, or by 8.6% at constant prices (Table 6) on the back of reduced oil and gas revenues. For this reason, the proportion of oil and gas revenues in the total budget revenues of the enlarged government declined in 2020 to 13.1% against 20.9% in 2019. For non-oil and gas revenues, there is a slight increase of Rb118.0 bn or by 0.4% in constant prices, which was achieved during the crisis on the back of the transfer to the federal budget of the Bank of Russia profit obtained from the sale of equity stake in Sberbank (reflected under other income). In the total revenue side of the expanded government’s budget, the federal budget revenues decreased to 49.4% in 2020, compared to 51.1% in 2019.
{"title":"Russia’s Fiscal Policy in 2020","authors":"I. Arlashkin, Natalya Barbashiova, S. Belev, A. Deryugin, E. Leonov, I. Sokolov, T. Tischenko","doi":"10.2139/ssrn.3904666","DOIUrl":"https://doi.org/10.2139/ssrn.3904666","url":null,"abstract":"The budget system revenues of the Russian Federation in 2020 shrank by Rb3.4 trillion in real terms compared to the previous year, or by 8.6% at constant prices (Table 6) on the back of reduced oil and gas revenues. For this reason, the proportion of oil and gas revenues in the total budget revenues of the enlarged government declined in 2020 to 13.1% against 20.9% in 2019. For non-oil and gas revenues, there is a slight increase of Rb118.0 bn or by 0.4% in constant prices, which was achieved during the crisis on the back of the transfer to the federal budget of the Bank of Russia profit obtained from the sale of equity stake in Sberbank (reflected under other income). In the total revenue side of the expanded government’s budget, the federal budget revenues decreased to 49.4% in 2020, compared to 51.1% in 2019.","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126545237","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Amandeep Kaur, R. Mohanty, L. Chakraborty, Divy Rangan
Using panel data models, we analyze the flypaper effects — whether intergovernmental fiscal transfers or states’ own income determine expenditure commitments — on ecological fiscal spending in India. The econometric results show that the unconditional fiscal transfers, rather than the states’ own income, determine ecological expenditure in the forestry sector at subnational levels in India. The results hold when the models are controlled for ecological outcomes and demographic variables.
{"title":"Ecological Fiscal Transfers and State-level Budgetary Spending in India: Analyzing the Flypaper Effects","authors":"Amandeep Kaur, R. Mohanty, L. Chakraborty, Divy Rangan","doi":"10.2139/ssrn.3885236","DOIUrl":"https://doi.org/10.2139/ssrn.3885236","url":null,"abstract":"Using panel data models, we analyze the flypaper effects — whether intergovernmental fiscal transfers or states’ own income determine expenditure commitments — on ecological fiscal spending in India. The econometric results show that the unconditional fiscal transfers, rather than the states’ own income, determine ecological expenditure in the forestry sector at subnational levels in India. The results hold when the models are controlled for ecological outcomes and demographic variables.","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123825463","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This independent evaluation aims to investigate the implementation of the 2020 State Budget of Azerbaijan. The pandemic, which has lasted since 2020, has brought significant changes in the world. The changes in terms of both quality and quantity were reflected in the economic environment and individual's livelihood. Because of the requirement for long-term quarantine conditions to battle the pandemic, both developed and developing countries have experienced economic downturns.
The research comprises forecast indicators defined by the appropriate executive authority during the year, as well as the draft legislation on 2020 state budget implementation, in addition to the forecast indicators represented in the material provided with the original and updated draft state budget for 2020.
The basic order is as follows; introduction, revenues, expenditures, fiscal sustainability, sequestration of costs, cost reduction, receipt of subsidies from the budget, optimization of receivables, distribution of expenditures, and debts. The results included graphical and tabular descriptions.
{"title":"Independent Assessment of the Implementation of the 2020 State Budget of Azerbaijan","authors":"Nigar Islamli","doi":"10.2139/ssrn.3863195","DOIUrl":"https://doi.org/10.2139/ssrn.3863195","url":null,"abstract":"This independent evaluation aims to investigate the implementation of the 2020 State Budget of Azerbaijan. The pandemic, which has lasted since 2020, has brought significant changes in the world. The changes in terms of both quality and quantity were reflected in the economic environment and individual's livelihood. Because of the requirement for long-term quarantine conditions to battle the pandemic, both developed and developing countries have experienced economic downturns.<br><br>The research comprises forecast indicators defined by the appropriate executive authority during the year, as well as the draft legislation on 2020 state budget implementation, in addition to the forecast indicators represented in the material provided with the original and updated draft state budget for 2020.<br><br>The basic order is as follows; introduction, revenues, expenditures, fiscal sustainability, sequestration of costs, cost reduction, receipt of subsidies from the budget, optimization of receivables, distribution of expenditures, and debts. The results included graphical and tabular descriptions.","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129539145","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-04-14DOI: 10.47772/IJRISS.2021.5231
Noell Machinjike, W. G. Bonga
Zimbabwe is one of the least fiscally performing countries in Sub-Saharan Africa, with some fiscal outcomes for years 2009 to 2019 being unsatisfactory. The IMF 2020 Article IV consultation report on Zimbabwe suggested that fiscal and monetary slippages experienced in 2018 and 2019 resulted in macroeconomic imbalances in 2019 and greater part of 2020. The study adopted a qualitative approach to investigate the relationship between fiscal discipline and the budget processes in Zimbabwe. Informed by the fiscal illusion theory as well as the formative fiscal federalism theory, the study established that the growth in fiscal indiscipline in Zimbabwe leads to widening fiscal deficits, increased direct budget financing requirements on the domestic market and unsustainable debt profile. Fiscal indiscipline is driven by weak budget institutional frameworks, party institutionalisation and economic sanctions.To enhance fiscal discipline, strengthening and implementation of existing fiscal institutional frameworks and engagement of the international community on sanctions are necessary. Publication of agreed fiscal targets for credibility purposes may help. Promoting increased savings during booms for consumption smoothening in periods during periods of droughts, cyclones and pandemics is encouraged.
{"title":"Fiscal Discipline and Budget Processes: Evidence from Zimbabwe","authors":"Noell Machinjike, W. G. Bonga","doi":"10.47772/IJRISS.2021.5231","DOIUrl":"https://doi.org/10.47772/IJRISS.2021.5231","url":null,"abstract":"Zimbabwe is one of the least fiscally performing countries in Sub-Saharan Africa, with some fiscal outcomes for years 2009 to 2019 being unsatisfactory. The IMF 2020 Article IV consultation report on Zimbabwe suggested that fiscal and monetary slippages experienced in 2018 and 2019 resulted in macroeconomic imbalances in 2019 and greater part of 2020. The study adopted a qualitative approach to investigate the relationship between fiscal discipline and the budget processes in Zimbabwe. Informed by the fiscal illusion theory as well as the formative fiscal federalism theory, the study established that the growth in fiscal indiscipline in Zimbabwe leads to widening fiscal deficits, increased direct budget financing requirements on the domestic market and unsustainable debt profile. Fiscal indiscipline is driven by weak budget institutional frameworks, party institutionalisation and economic sanctions.To enhance fiscal discipline, strengthening and implementation of existing fiscal institutional frameworks and engagement of the international community on sanctions are necessary. Publication of agreed fiscal targets for credibility purposes may help. Promoting increased savings during booms for consumption smoothening in periods during periods of droughts, cyclones and pandemics is encouraged.","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122031900","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This document provides details on the data and methods used to construct the estimates in the policy brief ‘Reducing Medicare Advantage Overpayments’, released by the Committee for a Responsible Federal Budget on February 23, 2021.
{"title":"Estimating the Magnitude of Medicare Advantage Coding Intensity and of the Budgetary Effects of Fully Adjusting for Differential MA Coding","authors":"R. Kronick, F. M. Chua","doi":"10.2139/ssrn.3792038","DOIUrl":"https://doi.org/10.2139/ssrn.3792038","url":null,"abstract":"This document provides details on the data and methods used to construct the estimates in the policy brief ‘Reducing Medicare Advantage Overpayments’, released by the Committee for a Responsible Federal Budget on February 23, 2021.","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125206385","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
One of the political effects of natural resource development is an increase in state budget resources directed at modernization. However, in Azerbaijan, infrastructure modernization has taken an odd turn: the government has been funding special interests rather than public needs. Instead of creating and updating much-needed electric, water, and gas infrastructure, the government is financing flashy sporting and cultural events and inflated entertainment infrastructure.
Azerbaijan hosts a number of over-the-top sporting and entertainment events under the disguise of modernization. Instead, the events lead to spiraling corruption and whitewashing the country’s global image.
{"title":"Corrupt and Flashy Events Disguised as Modernization in Azerbaijan","authors":"G. Ibadoghlu","doi":"10.2139/ssrn.3489634","DOIUrl":"https://doi.org/10.2139/ssrn.3489634","url":null,"abstract":"One of the political effects of natural resource development is an increase in state budget resources directed at modernization. However, in Azerbaijan, infrastructure modernization has taken an odd turn: the government has been funding special interests rather than public needs. Instead of creating and updating much-needed electric, water, and gas infrastructure, the government is financing flashy sporting and cultural events and inflated entertainment infrastructure.<br><br>Azerbaijan hosts a number of over-the-top sporting and entertainment events under the disguise of modernization. Instead, the events lead to spiraling corruption and whitewashing the country’s global image.<br><br><br><br>","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116480878","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ecumenopolis: "a town committed regarding the entire planet"; is the hypothetical notion concerning a planet-wide city. The word used to be invented in 1967 by means of the Greek metropolis designer Constantinos Doxiadis in imitation of signify the idea that including day town areas then megalopolises would finally center or at that place would be an odd continuous international town as a progression beside the cutting-edge urbanization, population growth, transport, then ethnical networks. This notion was in the meanwhile contemporary among learning narrative among 1942, along Trantor into the Foundation series. When committed public, Doxiadis' concept concerning stability ecumenopolis seemed "close longevity in imitation of science fiction," however lately is "surprisingly pertinent" in accordance to geography researchers Pavle Stamenovic, Dunja Predic & Davor Eres, especially then of globalization and Europeanization The Humanitarian Charter is worried about the most necessities for continuing the lives and respect of those influenced by disaster or strife, as reflected in the collection of worldwide human rights, compassionate and displaced person law. In helpful reaction, Asylum and settlement are recognizable terms that fall inside how much the privilege to lodging, which is cherished in human rights law. Everybody has the privilege of due lodging. This privilege is perceived in worldwide legitimate instruments and incorporates the privilege to live in security, harmony, and pride, and with the security of residency. Key parts of the privilege to lodging incorporate the accessibility of administrations, offices, materials, and framework; moderateness; tenability; openness; area; and Social fittingness. Ideal to lodging likewise reach out to merchandise and ventures, for example, maintainable access to characteristic and normal assets; safe drinking water; vitality for cooking, warming, and lighting; sanitation and washing offices; methods for nourishment stockpiling; reject transfer; site seepage; and crisis administrations. Everyone ought to have sufficient space and assurance from cool, clammy heat, downpour, wind or different dangers to well-being, auxiliary risks, and sickness vectors. The suitable sitting of settlements and lodging ought to give access to medicinal service's administrations, schools, youngster care focuses and other social offices and occupation openings. How lodging is built, the structure materials utilized, and the arrangements supporting these must properly empower the declaration of social character and assorted variety of lodgings. A town committed regarding the entire planet.
{"title":"'Sustainable Urban Shelter': Erectable within a Shared Used Facility when the Government Doesn’t Have a Budget","authors":"Mirmansour Naghibi","doi":"10.2139/ssrn.3449694","DOIUrl":"https://doi.org/10.2139/ssrn.3449694","url":null,"abstract":"Ecumenopolis: \"a town committed regarding the entire planet\"; is the hypothetical notion concerning a planet-wide city. The word used to be invented in 1967 by means of the Greek metropolis designer Constantinos Doxiadis in imitation of signify the idea that including day town areas then megalopolises would finally center or at that place would be an odd continuous international town as a progression beside the cutting-edge urbanization, population growth, transport, then ethnical networks. This notion was in the meanwhile contemporary among learning narrative among 1942, along Trantor into the Foundation series. When committed public, Doxiadis' concept concerning stability ecumenopolis seemed \"close longevity in imitation of science fiction,\" however lately is \"surprisingly pertinent\" in accordance to geography researchers Pavle Stamenovic, Dunja Predic & Davor Eres, especially then of globalization and Europeanization The Humanitarian Charter is worried about the most necessities for continuing the lives and respect of those influenced by disaster or strife, as reflected in the collection of worldwide human rights, compassionate and displaced person law. In helpful reaction, Asylum and settlement are recognizable terms that fall inside how much the privilege to lodging, which is cherished in human rights law. Everybody has the privilege of due lodging. This privilege is perceived in worldwide legitimate instruments and incorporates the privilege to live in security, harmony, and pride, and with the security of residency. Key parts of the privilege to lodging incorporate the accessibility of administrations, offices, materials, and framework; moderateness; tenability; openness; area; and Social fittingness. Ideal to lodging likewise reach out to merchandise and ventures, for example, maintainable access to characteristic and normal assets; safe drinking water; vitality for cooking, warming, and lighting; sanitation and washing offices; methods for nourishment stockpiling; reject transfer; site seepage; and crisis administrations. Everyone ought to have sufficient space and assurance from cool, clammy heat, downpour, wind or different dangers to well-being, auxiliary risks, and sickness vectors. The suitable sitting of settlements and lodging ought to give access to medicinal service's administrations, schools, youngster care focuses and other social offices and occupation openings. How lodging is built, the structure materials utilized, and the arrangements supporting these must properly empower the declaration of social character and assorted variety of lodgings. A town committed regarding the entire planet.","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132221061","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The effectiveness and the efficiency of a credit or an insurance program critically depend on the design of the program.In designing a program, the government should carefully consider various factors, including incentives of private parties, possible information advantages of private parties, and competition and liquidity in the target market. Due to failures to reflect these factors in the program design fully, many credit and insurance programs may not be serving their target populations effectively and efficiently.
Some partial loan guarantee programs allow private lenders to set the lending rate within a range. In these programs, lenders can increase the profit by lending more to high-risk borrowers who pay a high interest rate. Resulting inefficiencies include underserving of low-risk borrowers, excessive profits for lenders, and excessive costs to the government. Possible solutions include tying the guarantee fee to the lending rate and taking a partial ownership of loans. A main problem with direct loans and full loan guarantees is prepayments by low-risk borrowers. Two main ways to recapture the value of the prepayment option are a prepayment penalty and a high lending rate. The preferable way is a prepayment penalty because a high lending rate may further prompt low-risk borrower to prepay. To finance highly risky activities, such as technology start-ups, the government should take an equity position. Without sharing a few "jackpots," the government cannot recoup its investment. Nevertheless, the government takes a debt position in venture capital investments. The consequence is either that the government suffers large losses or that the government fails to finance truly high-risk, high-return projects. In some insurance programs, the government shares risk with private parties in a way that favors private parties. Private insurers have opportunities to take advantage of mispricing of insurance policies. Policyholders underpay during good times, but they don't necessarily make up the underpayment during bad times. An efficient way of sharing risk is that the government bears all of catastrophic risk and let private insurers bear policy-specific risk. The government implicitly guarantees GSE debts. Since GSEs have incentive to take excessive risk, the government is providing a very expensive guarantee free of charge. An explicit guarantee made available to both GSEs and private entities at a fee should lower the cost to the government, make the market more competitive, and contain financial crises effectively.
For proper budget discipline and efficient management, it is important to estimate the costs of credit programs accurately. The cost estimation for credit programs has two main steps: estimating future cashflows and discounting future cashflows to arrive at the net present value of cashflows. Some models estimating future cashflows do not fully consider the effects of economic fluctuations. The consequence can be a sy
{"title":"Design and Implementation of Federal Credit and Insurance Programs","authors":"Sangkyu Park","doi":"10.2139/ssrn.3367966","DOIUrl":"https://doi.org/10.2139/ssrn.3367966","url":null,"abstract":"The effectiveness and the efficiency of a credit or an insurance program critically depend on the design of the program.In designing a program, the government should carefully consider various factors, including incentives of private parties, possible information advantages of private parties, and competition and liquidity in the target market. Due to failures to reflect these factors in the program design fully, many credit and insurance programs may not be serving their target populations effectively and efficiently.<br><br>Some partial loan guarantee programs allow private lenders to set the lending rate within a range. In these programs, lenders can increase the profit by lending more to high-risk borrowers who pay a high interest rate. Resulting inefficiencies include underserving of low-risk borrowers, excessive profits for lenders, and excessive costs to the government. Possible solutions include tying the guarantee fee to the lending rate and taking a partial ownership of loans. A main problem with direct loans and full loan guarantees is prepayments by low-risk borrowers. Two main ways to recapture the value of the prepayment option are a prepayment penalty and a high lending rate. The preferable way is a prepayment penalty because a high lending rate may further prompt low-risk borrower to prepay. To finance highly risky activities, such as technology start-ups, the government should take an equity position. Without sharing a few \"jackpots,\" the government cannot recoup its investment. Nevertheless, the government takes a debt position in venture capital investments. The consequence is either that the government suffers large losses or that the government fails to finance truly high-risk, high-return projects. In some insurance programs, the government shares risk with private parties in a way that favors private parties. Private insurers have opportunities to take advantage of mispricing of insurance policies. Policyholders underpay during good times, but they don't necessarily make up the underpayment during bad times. An efficient way of sharing risk is that the government bears all of catastrophic risk and let private insurers bear policy-specific risk. The government implicitly guarantees GSE debts. Since GSEs have incentive to take excessive risk, the government is providing a very expensive guarantee free of charge. An explicit guarantee made available to both GSEs and private entities at a fee should lower the cost to the government, make the market more competitive, and contain financial crises effectively.<br><br>For proper budget discipline and efficient management, it is important to estimate the costs of credit programs accurately. The cost estimation for credit programs has two main steps: estimating future cashflows and discounting future cashflows to arrive at the net present value of cashflows. Some models estimating future cashflows do not fully consider the effects of economic fluctuations. The consequence can be a sy","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132724897","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Jelena Žarković Rakić, Marko Vladisavljević, J. Dávalos
Recent empirical evidence, largely based on descriptive analyses, suggests that womenâs wages and employment are more likely to be affected by government austerity measures because women constitute a majority of the public-sector labor force. Employing panel data from the 2014 and 2015 Labour Force Survey as pre- and post-treatment periods, we provide an econometric assessment of the effects of a 10% public-sector wage cut in Serbia that was introduced at the beginning of 2015. Wage cuts mandated by austerity measures increased the likelihood that younger and older women workers would transition into unemployment and inactivity, while no such effect was identified for men. On the other hand, evidence of heterogeneous compliance with the wage cut across public subsectors. State-owned enterprises, a subsector dominated by men, exhibited lower compliance with wage cuts compared to the state-sector, which is dominated by women. The difference in compliance prevented wage cuts from having the positive effect they could have had on the gender wage gap.
{"title":"The Effects of Austerity Measures on Gender Gaps in Labor Market Outcomes","authors":"Jelena Žarković Rakić, Marko Vladisavljević, J. Dávalos","doi":"10.2139/ssrn.3344578","DOIUrl":"https://doi.org/10.2139/ssrn.3344578","url":null,"abstract":"Recent empirical evidence, largely based on descriptive analyses, suggests that womenâs wages and employment are more likely to be affected by government austerity measures because women constitute a majority of the public-sector labor force. Employing panel data from the 2014 and 2015 Labour Force Survey as pre- and post-treatment periods, we provide an econometric assessment of the effects of a 10% public-sector wage cut in Serbia that was introduced at the beginning of 2015. Wage cuts mandated by austerity measures increased the likelihood that younger and older women workers would transition into unemployment and inactivity, while no such effect was identified for men. On the other hand, evidence of heterogeneous compliance with the wage cut across public subsectors. State-owned enterprises, a subsector dominated by men, exhibited lower compliance with wage cuts compared to the state-sector, which is dominated by women. The difference in compliance prevented wage cuts from having the positive effect they could have had on the gender wage gap.","PeriodicalId":116921,"journal":{"name":"PSN: Budgeting (Development) (Topic)","volume":"7 18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132345324","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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