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Boom-Bust Phases in Asset Prices and Fiscal Policy Behavior, Ludger Schuknecht, Albert Jaeger

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Abstract
Boom and bust phases in asset prices have become a pervasive feature of macroeconomic developments in many advanced economies. This paper studies fiscal policy during boom-bust phases in asset prices and draws several conclusions. First, expansions and contractions in economic activity during such boom-bust phases tend to be highly persistent, cyclical turning points are harder to forecast, and the margins of error for output gap estimates can be large. Second, conventional estimates of revenue elasticities seem not to allow an accurate assessment of the fiscal stance and of the strength of underlying fiscal positions during boom-bust phases. And third, boom-bust phases tend to exacerbate already existing procyclical policy biases, as well as political-economy biases, toward higher spending and public debt ratios
Table Of Contents
""Contents""; ""I. INTRODUCTION""; ""II. IDENTIFYING BOOM AND BUST PHASES IN ASSET PRICES""; ""III. ASSET PRICE SWINGS AND GAUGING OUTPUT DEVELOPMENTS""; ""IV. ASSET PRICE SWINGS, FISCAL DEVELOPMENTS AND POLICY BEHAVIOR""; ""V. LESSONS FOR FISCAL POLICY""; ""VI. CONCLUSIONS""; ""References""
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (36 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781281155849

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