Buchanan and Wagner pointed to an asymmetry in the political rewards of deficits and surpluses, with the former being preferable to the latter. They assigned the rise of this asymmetry to the popularization of Keynesian ideas. We test both claims by relying on the historical reputation surveys of US presidents since 1948. Historical reputations have long been something presidents have cared about, and they constitute a reliable way to assess whether their reputations suffer or gain from having run deficits. We find evidence that the size of deficits tends to be associated with greater presidential scores and that this effect is stronger in more recent surveys, when Keynesian ideas were more popular.
{"title":"Presidents in Deficit: Are there Historical Rewards to Deficits?","authors":"Vincent J. Geloso, M. Shera","doi":"10.2139/ssrn.3950744","DOIUrl":"https://doi.org/10.2139/ssrn.3950744","url":null,"abstract":"Buchanan and Wagner pointed to an asymmetry in the political rewards of deficits and surpluses, with the former being preferable to the latter. They assigned the rise of this asymmetry to the popularization of Keynesian ideas. We test both claims by relying on the historical reputation surveys of US presidents since 1948. Historical reputations have long been something presidents have cared about, and they constitute a reliable way to assess whether their reputations suffer or gain from having run deficits. We find evidence that the size of deficits tends to be associated with greater presidential scores and that this effect is stronger in more recent surveys, when Keynesian ideas were more popular.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125816336","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 macroeconomic forecast prepared by the Ministry of Economy of the Republic of Azerbaijan emphasized the main priorities for the budget policy for the upcoming five years. The forecast was prepared following the order "Azerbaijan 2030: National Priorities for Socio-Economic Development" and its main notations. An analysis of the forecast depicts the main features of the report, assessing the current environment and eligibility of the major points outlined. The forecast highlighted the primary targets for the medium and long terms, accentuating the importance of moving towards a more diversified and sustainable economy.
{"title":"A Comparative Assessment for 2022 State Budget in Azerbaijan","authors":"N. Gasimova","doi":"10.2139/ssrn.3924766","DOIUrl":"https://doi.org/10.2139/ssrn.3924766","url":null,"abstract":"The macroeconomic forecast prepared by the Ministry of Economy of the Republic of Azerbaijan emphasized the main priorities for the budget policy for the upcoming five years. The forecast was prepared following the order \"Azerbaijan 2030: National Priorities for Socio-Economic Development\" and its main notations. An analysis of the forecast depicts the main features of the report, assessing the current environment and eligibility of the major points outlined. The forecast highlighted the primary targets for the medium and long terms, accentuating the importance of moving towards a more diversified and sustainable economy.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114982773","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}
Olivier Accominotti, Thilo N. H. Albers, K. Oosterlinck
Sovereign governments often discriminate between creditors during debt default episodes. This paper explores how expectations of selective default affect sovereign bond trading and sovereign risk premia based on a historical laboratory: the German external default of the 1930s. We exploit a unique feature of the interwar sovereign bond market: identical German government bonds were traded on different creditor countries’ secondary debt markets but investors expected creditors from various countries to be treated differently in case of default. We show that, when creditor countries’ secondary debt markets are integrated, selective default expectations are not reflected in bond yields but affect the volume of bonds traded across markets. By contrast, when creditors’ debt markets are geographically segmented, a large selective risk premium can be priced in sovereign bonds. This premium accounted for up to half of the total risk premium on German external bonds during the 1930s. We establish that creditor countries’ seniority ranks can be explained by their economic power over the debtor government.
{"title":"Selective Default Expectations","authors":"Olivier Accominotti, Thilo N. H. Albers, K. Oosterlinck","doi":"10.2139/ssrn.3907792","DOIUrl":"https://doi.org/10.2139/ssrn.3907792","url":null,"abstract":"Sovereign governments often discriminate between creditors during debt default episodes. This paper explores how expectations of selective default affect sovereign bond trading and sovereign risk premia based on a historical laboratory: the German external default of the 1930s. We exploit a unique feature of the interwar sovereign bond market: identical German government bonds were traded on different creditor countries’ secondary debt markets but investors expected creditors from various countries to be treated differently in case of default. We show that, when creditor countries’ secondary debt markets are integrated, selective default expectations are not reflected in bond yields but affect the volume of bonds traded across markets. By contrast, when creditors’ debt markets are geographically segmented, a large selective risk premium can be priced in sovereign bonds. This premium accounted for up to half of the total risk premium on German external bonds during the 1930s. We establish that creditor countries’ seniority ranks can be explained by their economic power over the debtor government.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121539807","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 heavy metal band Metallica’s performance history provides evidence for a particular theory of how power law distributions in data are formed.
重金属乐队Metallica的演出历史为数据中的幂律分布是如何形成的特定理论提供了证据。
{"title":"Is Metallica Fractal? A Case Study","authors":"D. Lane","doi":"10.2139/ssrn.3905691","DOIUrl":"https://doi.org/10.2139/ssrn.3905691","url":null,"abstract":"The heavy metal band Metallica’s performance history provides evidence for a particular theory of how power law distributions in data are formed.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129167371","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}
During and in the aftermath of the euro area sovereign debt crisis, many considered a common safe asset as a necessary condition for a stable European monetary union (EMU). However, intellectual efforts had far outstripped tangible policy action, until the pandemic turned the political debate upside down. Even though euro area governments agreed on the creation of the European Stability Mechanism (ESM), a lender-of-last resort to members of the currency union, a mechanism for (substantial) joint borrowing has been absent to date, as has been common deposit insurance, common unemployment insurance or other automatic stabilizers. In short, EMU suffers from the congenital defect of a lack of significant fiscal capacity. Against this backdrop, this Chapter investigates the past, present, and future of safe assets in the EU. It is structured as follows. Section 2 reviews past borrowing programs and the safe assets these have produced. We show that the NGEU’s financing mechanism is not new; rather it is a scaled-up version of past EU borrowing programs. The Section also discusses the euro area’s two borrowing mechanism via separate supranational issuer: the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM). Section 3 zooms in on the legal aspects of EU safe assets, highlighting both commonalities and differences between the various debt issuance programs and analyzing the pertinent legal features of the debt instruments the EU has relied on. Section 4 concludes.
{"title":"European Safe Assets: Past, Present, and Future","authors":"S. Grund, M. Waibel","doi":"10.2139/ssrn.3887534","DOIUrl":"https://doi.org/10.2139/ssrn.3887534","url":null,"abstract":"During and in the aftermath of the euro area sovereign debt crisis, many considered a common safe asset as a necessary condition for a stable European monetary union (EMU). However, intellectual efforts had far outstripped tangible policy action, until the pandemic turned the political debate upside down. Even though euro area governments agreed on the creation of the European Stability Mechanism (ESM), a lender-of-last resort to members of the currency union, a mechanism for (substantial) joint borrowing has been absent to date, as has been common deposit insurance, common unemployment insurance or other automatic stabilizers. In short, EMU suffers from the congenital defect of a lack of significant fiscal capacity. Against this backdrop, this Chapter investigates the past, present, and future of safe assets in the EU. It is structured as follows. Section 2 reviews past borrowing programs and the safe assets these have produced. We show that the NGEU’s financing mechanism is not new; rather it is a scaled-up version of past EU borrowing programs. The Section also discusses the euro area’s two borrowing mechanism via separate supranational issuer: the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM). Section 3 zooms in on the legal aspects of EU safe assets, highlighting both commonalities and differences between the various debt issuance programs and analyzing the pertinent legal features of the debt instruments the EU has relied on. Section 4 concludes.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114283080","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 study examines whether budget ratcheting occurs in Japanese private colleges and universities (PC&Us) and how debtholders affect it. We predict that managers of Japanese PC&Us have incentives to increase their budgets in order to enhance their reputation from internal stakeholders; moreover, most of their stakeholders are less likely to strictly monitor the manager’s behavior, which creates the opportunity for budget ratcheting. First, we find that the budget for program expense increases associated with prior year overspending is larger than for decreases associated with underspending of the same amount, consistent with the budget ratcheting hypothesis. Second, we also find that the extent of budget ratcheting is less pronounced in PC&Us with debtholders and earnings losses, suggesting that debtholders such as banks monitor budgetary practices. This study contributes to the budget ratcheting literature by adding new findings on the budget ratcheting practices of nonprofit organizations, namely, PC&Us.
{"title":"Budget Ratcheting and Debtholders’ Monitoring: Evidence from Private Colleges and Universities","authors":"Makoto Kuroki, Akinobu Shuto","doi":"10.2139/ssrn.3140583","DOIUrl":"https://doi.org/10.2139/ssrn.3140583","url":null,"abstract":"This study examines whether budget ratcheting occurs in Japanese private colleges and universities (PC&Us) and how debtholders affect it. We predict that managers of Japanese PC&Us have incentives to increase their budgets in order to enhance their reputation from internal stakeholders; moreover, most of their stakeholders are less likely to strictly monitor the manager’s behavior, which creates the opportunity for budget ratcheting. First, we find that the budget for program expense increases associated with prior year overspending is larger than for decreases associated with underspending of the same amount, consistent with the budget ratcheting hypothesis. Second, we also find that the extent of budget ratcheting is less pronounced in PC&Us with debtholders and earnings losses, suggesting that debtholders such as banks monitor budgetary practices. This study contributes to the budget ratcheting literature by adding new findings on the budget ratcheting practices of nonprofit organizations, namely, PC&Us.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-03-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133703315","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}
Russian Abstract: Бюджетная устойчивость предполагает, с одной стороны, сбалансированность развития (устойчивость в долгосрочной перспективе), с другой – резилиентность, то есть краткосрочную устойчивость к внешним шокам. Долговая устойчивость обеспечивает условия для контрциклической бюджетной политики. English Abstract: Fiscal sustainability presupposes, on the one hand, balanced development (sustainability in the long term), and on the other, sustainability, that is, short-term resilience to external shocks. Debt sustainability provides the conditions for countercyclical fiscal policy.
{"title":"БЮДЖЕТНАЯ УСТОЙЧИВОСТЬ: СОСТОЯНИЕ В РОССИИ (Budgetary Sustainability: State in Russia)","authors":"E. Timushev, Anna A. Mikhaylova","doi":"10.2139/ssrn.3860268","DOIUrl":"https://doi.org/10.2139/ssrn.3860268","url":null,"abstract":"Russian Abstract: Бюджетная устойчивость предполагает, с одной стороны, сбалансированность развития (устойчивость в долгосрочной перспективе), с другой – резилиентность, то есть краткосрочную устойчивость к внешним шокам. Долговая устойчивость обеспечивает условия для контрциклической бюджетной политики. English Abstract: Fiscal sustainability presupposes, on the one hand, balanced development (sustainability in the long term), and on the other, sustainability, that is, short-term resilience to external shocks. Debt sustainability provides the conditions for countercyclical fiscal policy.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117137854","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}
Meta S. Brown, Donghoon Lee, Joelle Scally, Wilbert van der Klaauw
Real aggregate debt in the hands of Americans age 50 to 80 increased by 59 percent between 2003 and 2015. Meanwhile, real debt held by Americans in their 20s and 30s was approximately flat. Using data from the Federal Reserve Bank of New York’s Consumer Credit Panel, we describe the extent of this debt increase and the distribution of debt growth by loan type. Real per capita home-secured debts held by older consumers show the steepest growth, though older borrowers have increased their obligations in all major debt categories. For long-held debts, these developments lead us to evaluate how such changes emerged.
{"title":"The Graying of American Debt","authors":"Meta S. Brown, Donghoon Lee, Joelle Scally, Wilbert van der Klaauw","doi":"10.2139/ssrn.3540474","DOIUrl":"https://doi.org/10.2139/ssrn.3540474","url":null,"abstract":"Real aggregate debt in the hands of Americans age 50 to 80 increased by 59 percent between 2003 and 2015. Meanwhile, real debt held by Americans in their 20s and 30s was approximately flat. Using data from the Federal Reserve Bank of New York’s Consumer Credit Panel, we describe the extent of this debt increase and the distribution of debt growth by loan type. Real per capita home-secured debts held by older consumers show the steepest growth, though older borrowers have increased their obligations in all major debt categories. For long-held debts, these developments lead us to evaluate how such changes emerged.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133679765","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 currently ongoing novel Coronavirus-crisis is an external shock coming down on society with direct impact on societal moods and subsequently connected economic changes. With growing digitalization and quickening of transfer speed, information exchange in the individual involvement to break trends online on a global scale may impose unknown systemic risks in causing social volatility in international economics. Research may explore how human beings’ communication and interaction results in socially constructed volatility that echoes in economic correlates. This paper proposes to explore the role of communication and temporal foci in pandemic communication to create social volatility underlying economic downturns with attention to international differences. Comparing the economic consequence of the endogenous crunch of the 2008 World Financial Recession with the external economic shock of the COVID-19 pandemic could aid to retrieve crisis-specific recovery recommendations. Understanding how the social compound forms economic outcomes promises to explain how market outcomes are developed in society and can be shaped by strategic communication with special attention to new media technologies.
{"title":"On the Collective Moods of Booms and Busts: Socio-Psychological Foundations in External Shock Communication and Social Volatility in the COVID-19 Economic Fallout","authors":"Julia M. Puaschunder","doi":"10.2139/ssrn.3695751","DOIUrl":"https://doi.org/10.2139/ssrn.3695751","url":null,"abstract":"The currently ongoing novel Coronavirus-crisis is an external shock coming down on society with direct impact on societal moods and subsequently connected economic changes. With growing digitalization and quickening of transfer speed, information exchange in the individual involvement to break trends online on a global scale may impose unknown systemic risks in causing social volatility in international economics. Research may explore how human beings’ communication and interaction results in socially constructed volatility that echoes in economic correlates. This paper proposes to explore the role of communication and temporal foci in pandemic communication to create social volatility underlying economic downturns with attention to international differences. Comparing the economic consequence of the endogenous crunch of the 2008 World Financial Recession with the external economic shock of the COVID-19 pandemic could aid to retrieve crisis-specific recovery recommendations. Understanding how the social compound forms economic outcomes promises to explain how market outcomes are developed in society and can be shaped by strategic communication with special attention to new media technologies.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114624398","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 paper deal with the necessity of balanced budget. The Budget is the government’s lifeline because all states do their financial activities including all revenue and expenditure and implementation of their plans in the framework of budget and it has vital role in economic development. The studies show that, it is good to have balanced budget but always we cannot to hold a balanced budget because of some other economic factors. The main problem when a nation faces a deficit budget is war and economics recession. There are different views about budget balance some economists say it is good but others disagree. I have chosen Afghanistan as a case study and I compared the revenue and expenditure for 2010-2016. In the first section of this paper, we have introduction, short history and definition of related topics, in the second section research methodology, and at the last part conclusion.
{"title":"Viewing the Significance of a Balanced Budget, Is It Necessary of Having It or Not?","authors":"Zahra Musafir Zada","doi":"10.2139/ssrn.3686823","DOIUrl":"https://doi.org/10.2139/ssrn.3686823","url":null,"abstract":"This paper deal with the necessity of balanced budget. The Budget is the government’s lifeline because all states do their financial activities including all revenue and expenditure and implementation of their plans in the framework of budget and it has vital role in economic development. The studies show that, it is good to have balanced budget but always we cannot to hold a balanced budget because of some other economic factors. The main problem when a nation faces a deficit budget is war and economics recession. There are different views about budget balance some economists say it is good but others disagree. I have chosen Afghanistan as a case study and I compared the revenue and expenditure for 2010-2016. In the first section of this paper, we have introduction, short history and definition of related topics, in the second section research methodology, and at the last part conclusion.","PeriodicalId":127865,"journal":{"name":"Political Economy: Budget","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128213758","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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