Fiscal multipliers in Ireland using FIR-GEM model. ESRI WP636, September 2019

This article employs the newly developed FIR-GEM model to compute fiscal multipliers in Ireland for the main tax-spending policy instruments, namely government consumption, public investment, public wages, public transfers, consumption, capital and labour taxes. We focus on the short run fiscal multipliers as a measure to evaluate the effect of a temporary fiscal stimulus policy over three years. We find that the size of output multipliers crucially depends on the openness of the Irish economy and the method of fiscal financing employed. Our main results indicate that spending increases or tax cuts increase Irish GDP but Irish fiscal multipliers are relatively smaller in magnitude due to the openness of the economy. That is the increase in aggregate output is partly offset due to the negative effect of a fiscal stimulus in the Irish external balance. A fiscal expansion via spending increases or tax cuts results in a compositional change in aggregate Irish output. The positive effects on aggregate output come mostly from the stimulative effects induced in the non-tradable sector while the tradable sector remains unaffected or reduces in size. A fiscal stimulus is likely to crowd out exports and crowd in imports; this results in a deterioration in Irish trade balance. Magnitude-wise short run spending multipliers are consistently higher than short run tax multipliers. The highest fiscal multiplier effect is as a result of spending on public investment and government consumption. A fiscal stimulus via spending and consumption tax cuts have a higher effect on impact but can put upward pressures on domestic prices vis-à-vis the rest of the world and lead to a deterioration in Irish international competitiveness in the longer run. A fiscal stimulus via income tax cuts take more time to materialize and has a smaller effect on impact but the stimulus can reduce production costs and prices. This improves the international competitiveness of the Irish economy and has a more positive effect over the longer-term

Some Considerations about Decisions and Decision-Makers in Hospital Ethics Committees

This paper presents a brief history of the development of hospital ethics committees. Following the introduction, areas of decision vulnerability are considered. Areas of potential concern include committee composition, including the influence of experts upon the decisions and decision makers. Also considered are bounded rationality, herd behavior and informational cascades. The paper ends with some suggestions about decisions and decision-makers for hospital ethics committees

Does legislative turnover adversely affect state expenditure policy? Evidence from Indian state elections

I examine the effect of legislative turnover on the size and composition of government expenditures in Indian state elections during 1980-2000. The paper finds that excessive turnover in Indian state elections results in an inefficient government expenditure policy. First, the higher the turnover, the larger is the size of government. Second, excessive turnover affects the allocative efficiency of the government expenditure by skewing the composition of government spending towards pure consumption expenditure and away from more productive investment expenditure. The findings imply that a lack of a proper commitment mechanism in political markets could be a source of inefficiency in government policy.Legislative turnover; Indian elections; government spending

Military Expenditure, Threats, and Growth

This paper clarifies one of the puzzling results of the economic growth literature: the impact of military expenditure is frequently found to be non-significant or negative, yet most countries spend a large fraction of their GDP on defense and the military. We start by empirical evaluation of the non-linear interactions between military expenditure, external threats, corruption, and other relevant controls. While growth falls with higher levels of military spending, given the values of the other independent variables, we show that military expenditure in the presence of threats increases growth. We explain the presence of these non-linearities in an extended version of Barro and Sala-i-Martin (1995), allowing the dependence of growth on the severity of external threats, and on the effective military expenditure associated with these threats.

Global Aging: Issues, Answers, More Questions

Global aging will be a major determinant of long run economic development in industrial and developing countries. The extent of the demographic changes is dramatic and will deeply affect future labor, financial and goods markets. The expected strain on public budgets and especially social security has already received prominent attention, but the aging poses many other economic challenges that threaten productivity and growth if they remain unaddressed. While aging is global, there are marked differences in the speed and the extent of the aging processes across countries. These differences are likely to generate different growth paths and change the international pecking order, e.g. within the G8 countries. Due to the globalization of labor, financial and goods markets, however, these differential demographic developments will also precipitate trade and factor movements. Exploiting these movements offers large chances during the aging process. The purpose of this paper is to review the most important economic chances and challenges due to global aging. It summarizes what we know and identifies research areas where it is important to know more.

Global Aging: Issues, Answers, More Questions

Global aging will be a major determinant of long run economic development in industrial and developing countries. The extent of the demographic changes is dramatic and will deeply affect future labor, financial and goods markets. The expected strain on public budgets and especially social security has already received prominent attention, but the aging poses many other economic challenges that threaten productivity and growth if they remain unaddressed. While aging is global, there are marked differences in the speed and the extent of the aging processes across countries. These differences are likely to generate different growth paths and change the international pecking order, e.g. within the G8 countries. Due to the globalization of labor, financial and goods markets, however, these differential demographic developments will also precipitate trade and factor movements. Exploiting these movements offers large chances during the aging process. Purpose of this paper is to review the most important economic chances and challenges due to global aging. It summarizes what we know and identifies research areas where it is important to know more.