Fiscal Policy and Economic Activity: U.S. Evidence

We investigate the dynamic effects of five different fiscal shocks on the US economy using a structural vector autoregressive (SVAR) model that uses Blanchard-Quah type restrictions. We find that an increase in indirect taxes or in corporate taxes has a contractionary effect on the economy, while an increase in personal taxes is neither contractionary, nor expansionary. These results imply that the Ricardian Equivalence hypothesis holds only for personal taxes. On the spending side, we find that an increase in government wages and salaries has a contractionary effect on the economy, while an increase in defense spending is expansionary. Our results suggest that different fiscal shocks have different and offsetting effects on the economy, and using aggregated data may, therefore, conceal the effects of fiscal policy.

Fiscal Shocks, the Trade Balance, and the Exchange Rate

This paper investigates empirically, using a VAR model, the response of the exchange rate and the trade balance to fiscal policy shocks for the U.S. economy during the period 1981:3-2005:3. The results indicate that positive shocks to real government purchases generate a persistent increase in the budget deficit, a transitory expansionary effect on output, and a long-lived positive effect on the price level, but reduce the real interest rate. Simultaneously, and consistent with interest parity, the real exchange rate depreciates, and the trade balance improves. Negative shocks to net taxes also generate a persistent increase in the budget deficit, and the effects on the model variables are generally in the same direction, but are almost never significant. Our results indicate it is inappropriate to attribute rising trade balance deficits to expansionary fiscal policy shocks, even though these shocks generate long-lived increases in the budget deficit.

International Transmission of Fiscal Shocks: An Empirical Investigation

This paper investigates how innovations in income taxes and government purchases originating in the U.S. affect the U.S. economy, and how these effects are transmitted to the Canadian economy. Using a semi-structural VAR model and data for both countries for the 1961:1-2004:3 period, we find that fiscal policy innovations originating in the U.S. are transmitted to the Canadian economy by international trade and capital flows through interest rate and exchange rate channels. Unanticipated shocks to U.S. government purchases have beggar thy neighbor effects on Canada. U.S. output increases and Canadian output decreases in response to a positive shock to U.S. government purchases. In response to an unanticipated increase in U.S. income taxes, U.S. output declines while U.S. and Canadian real interest rates rise. The response of Canadian output, however, is not significantly different from zero.

Are Some Taxes Different than Others? An Empirical Investigation of Tax Policy in Canada

This paper investigates the response of major macroeconomic variables to four different types of tax policy innovations in Canada within a VAR framework. The positive tax multipliers documented in the previous literature are found only for corporate tax innovations. Our results imply that different taxes affect the output differently, and the composition of the total tax response may be a major factor behind cross-country variation in the sign and magnitude of total tax multipliers. Keywords: Tax Policy, VA

Graphic images: visual intervention within the architectural environment

Ankara : The Department of Graphic Design and the Institute of Fine Arts of Bilkent University, 1993.Thesis (Master's) -- Bilkent University, 1993.Includes bibliographical references leaves 60-61.The intention of this study is to analyze the role of visual communication systems made up of graphic images within the human-space communication framework. The information content of the man-made environment is examined and the effects of graphic images in human-space communication are discussed by illustrated examples. A research is carried on how information is translated into a visual form through examination of steps from conceptualization to juxtaposition of graphic images in space, and how they are perceived a-hd understood. Finally, considerations on how visual communication systems interrelate with the architectural environment to generate messages for identification of particular characteristics of that space.Özgen, Faik KorayM.S

Nonlinear growth effects of taxation: A semi-parametric approach using average marginal Tax Rates

One of the major challenges of empirical tax research is the identification and calculation of appropriate tax data. While there is consensus that average marginal tax rates are most suitable for studying the effects of tax policy on economic growth, because of data limitations the calculation of marginal tax rates has been limited to the USA and the UK. This paper provides calculations of average marginal tax rates for the four Scandinavian countries using the methodologies of Seater (1982, 1985) and Barro and Sahasakul (1983, 1986). Then, by pooling the newly calculated tax rates for the Scandinavian countries with the data for the USA and the UK, we investigate the effects of tax policy shocks on the per capita GDP growth rate. Our results suggest that an increase in average marginal tax rates has a negative impact on economic growth. Employing additive mixed panel models with penalized splines as estimation approach, we show that changes in tax rates have nonlinear effects. Increasing average marginal tax rates turn out to be the most distorting at relatively moderate tax rates. © 2013 John Wiley & Sons, Ltd

Fiscal Multipliers in Good Times and Bad Times

This paper estimates the magnitudes of government spending and tax multipliers within a regime-switching framework for the U.S economy during the period 1949:1- 2006:4. Our results show that the magnitudes of spending multipliers are larger during periods of low economic activity, while the magnitudes of tax multipliers are larger during periods of high economic activity. We also show that the magnitudes of fiscal multipliers got smaller for episodes of low growth, while they got larger for episodes of high growth in the post 1980 period. Analyzing the effects of government spending and taxes on consumption and investment spending indicates that the magnitude of the effects of fiscal shocks on consumption and investment is very small

Government Debt, Economic Activity, and Transmission of Economic Disturbances.

This paper analyzes the effects of government debt on output and the trade bala nce in a two-country rational expectations model of the world economy It is shown that perceived changes in government debt do not affect the level of economic activity but unperceived changes in the home country's government debt are correlated positively with its output and negatively with its trade balance. Unperceived increases in the foreign country's government debt, however, have a positive impact on the home country's output and the trade balance. Empirical evidence from the U.S. is consistent with most of the implications of the model. Copyright 1987 by Ohio State University Press.