Government Spending Effects in Low income Countries is popular PDF and ePub book, written by Ms.Wenyi Shen in 2015-12-30, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Government Spending Effects in Low income Countries can be Read Online from any device for your convenience.
Government Spending Effects in Low income Countries Book PDF Summary
Despite the voluminous literature on fiscal policy, very few papers focus on low-income countries (LICs). This paper develops a new-Keynesian small open economy model to show, analytically and through simulations, that some of the prevalent features of LICs—different types of financing including aid, the marginal efficiency of public investment, and the degree of home bias—play a key role in determining the effects of fiscal policy and related multipliers in these countries. External financing like aid increases the resource envelope of the economy, mitigating the private sector crowding out effects of government spending and pushing up the output multiplier. The same external financing, however, tends to appreciate the real exchange rate and as a result, traded output can respond quite negatively, reducing the overall output multiplier. Although capital scarcity implies high returns to public capital in LICs, declines in public investment efficiency can substantially dampen the output multiplier. Since LICs often import substantial amounts of goods, public investment may not be as effective in stimulating domestic production in the short run.
Detail Book of Government Spending Effects in Low income Countries PDF
- Author : Ms.Wenyi Shen
- Release : 30 December 2015
- Publisher : International Monetary Fund
- ISBN : 9781513578972
- Genre : Business & Economics
- Total Page : 48 pages
- Language : English
- PDF File Size : 18,6 Mb
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