Can Fiscal Policy Stimulus Boost Economic Recovery?

We assess the role played by fiscal policy in explaining the dynamics of asset markets. Using a panel of ten industrialized countries, we show that a positive fiscal shock has a negative impact in both stock and housing prices. However, while stock prices immediately adjust to the shock and the effect of fiscal policy is temporary, housing prices gradually and persistently fall. Consequently, the attempts of fiscal policy to mitigate stock price developments (e.g. via taxes on capital gains) may severely de-stabilize housing markets. The empirical findings also point to significant fiscal multiplier effects in the context of severe housing busts, which gives rise to the importance of the implementation of fiscal stimulus packages. In addition, our results suggest that when governments run a budget deficit, they place an upward pressure on real interest rates, which "crowds-out" private consumption and investment. In contrast, during bust periods, unexpected variation in the fiscal stance crowds-in private spending, which reflects the "direct" and "indirect" effects of policy actions impact arising from a downward movement in real interest rates and an upward revision in price level expectations.Fiscal policy, asset prices, panel VAR.

Fiscal Policy Discretion, Private Spending, and Crisis Episodes

In this paper, we assess the impact of fiscal policy discretion on economic activity in the short and medium-term. Using a panel of 132 countries from 1960 to 2008, we find that fiscal policy discretion provides a net stimulus to the economy in the short-run and crowding-in effects are amplified once crisis episodes are controlled for– in particular, banking crises - giving a great scope for fiscal policy stimulus packages. However, crowding-out effects take over in the long-run – especially, in the case of debt crises -, in line with the concerns about long-term debt sustainability.Fiscal policy discretion, GDP growth, private consumption, private investment, crowding-in, crowding-out.

Inflation scares and bond market signals: is the Fed's policy action asymmetric?

This paper is concerned with the question whether, over the last two decades, the priority to maintain the credibility as inflation 'fighter' induced the Fed to conduct a monetary policy that can be considered asymmetric in nature. Considering that the longer-term bond interest rate is the most reliable indicator used to gauge Fed's credibility to low inflation, we investigate the equilibrium-type relationship between the monetary policy instrument, the Federal Funds rate, and 10-year government bond rate within a threshold-cointegration framework in a similar fashion of Enders and Siklos (2001). Our empirical findings indicate that, during the period 1980-2005, both the direction and magnitude of changes in long-term expected inflation, reflected in 10-year bond rate movements, influenced the timing of the Fed's action. Therefore, we conclude that asymmetries in the term-spread dynamics are the result of the Fed's behaviour that can be considered representative of a monetary policy essentially asymmetric

Booms and busts in housing markets: determinants and implications

This study looks at real estate price booms and busts in industrialised countries. It identifies major and persistent deviations from long term trends for 18 countries and estimates the probabilities of their occurrence using a Random Effects Panel Probit model over the period 1980-2007. It finds that 1) most recent housing booms have been very persistent and of a significant magnitude; 2) there appears to be a strong correlation between the persistence and magnitude of booms and subsequent busts; 3) economic costs (in terms of GDP losses during the post-boom phase) depend significantly on the magnitude and duration of the boom and money and credit developments during that period; 4) a number of policy variables, including short term interest rates, local and global money and credit developments, and the incidence of mortgage market deregulation affect significantly the probability of experiencing booms and busts; and 5) the model is quite successful in identifying booms and busts early on

The A(Kstop−,π±Σ∓)A′A(K^-_{stop},\pi^\pm\Sigma^\mp)A' reaction on p-shell nuclei

This letter is concerned with the study of the $K^-_{stop}A\rightarrow \pi^\pm\Sigma^\mp A'$ reaction in p-shell nuclei, i.e., $^{6,7}Li$, $^9Be$, $^{13}C$ and $^{16}O$. The $\pi^\pm\Sigma^\mp / K^-_{stop}$ emission rates are reported as a function of $A$. These rates are discussed in comparison with previous findings. The ratio $\pi^-\Sigma^+/\pi^+\Sigma^-$ in p-shell nuclei is found to depart largely from that on hydrogen, which provides support for large in-medium effects possibly generated by the sub-threshold $\Lambda(1405)$. The continuum momentum spectra of prompt pions and free sigmas are also discussed as well as the $\pi^\pm\Sigma^\mp$ missing mass behavior and the link with the reaction mechanism. The apparatus used for the investigation is the FINUDA spectrometer operating at the DA$\Phi$NE $\phi$-factory (LNF-INFN, Italy).Comment: 14 pages, 5 figures, accepted for publication in Phys. Lett.

29Si Hyperfine Structure of the E'_\alpha Center in Amorphous Silicon Dioxide

We report a study by electron paramagnetic resonance (EPR) on the E'_\alpha point defect in amorphous silicon dioxide (a-SiO2). Our experiments were performed on gamma-ray irradiated oxygen-deficient materials and pointed out that the 29Si hyperfine structure of the E'_alpha consists in a pair of lines split by 49 mT. On the basis of the experimental results a microscopic model is proposed for the E'_alpha center, consisting in a hole trapped in an oxygen vacancy with the unpaired electron sp3 orbital pointing away from the vacancy in a back-projected configuration and interacting with an extra oxygen atom of the a-SiO2 matrix.Comment: 4 page

Fiscal policy discretion, private spending and crises episodes

In this paper, we assess the impact of fiscal policy discretion on economic activity in the short and medium-term. Using a panel of 132 countries from 1960 to 2008, we find that fiscal policy discretion provides a net stimulus to the economy in the short-run and crowding-in effects are amplified once crisis episodes are controlled for\u2013 in particular, banking crises - giving a great scope for fiscal policy stimulus packages. However, crowding-out effects take over in the long-run \u2013 especially, in the case of debt crises -, in line with the concerns about long-term debt sustainability

Structural relaxation of E' gamma centers in amorphous silica

We report experimental evidence of the existence of two variants of the E' gamma centers induced in silica by gamma rays at room temperature. The two variants are distinguishable by the fine features of their line shapes in paramagnetic resonance spectra. These features suggest that the two E' gamma differ for their topology. We find a thermally induced interconversion between the centers with an activation energy of about 34 meV. Hints are also found for the existence of a structural configuration of minimum energy and of a metastable state.Comment: 4 pages, 2 figures, submitted to Phys. Rev. Let

Coulomb corrections to low energy antiproton annihilation cross sections on protons and nuclei

We calculate, in a systematic way, the enhancement effect on antiproton-proton and antiproton-nucleus annihilation cross sections at low energy due to the initial state electrostatic interaction between the projectile and the target nucleus. This calculation is aimed at future comparisons between antineutron and antiproton annihilation rates on different targets, for the extraction of pure isospin channels.Comment: 18 pages, 4 figures (latex format