New Keynesian versus old Keynesian government spending multipliers

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modeling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large

Fiscal consolidation strategy: An update for the budget reform proposal of march 2013

Recently, we evaluated a fiscal consolidation strategy for the United States that would bring the government budget into balance by gradually reducing government spending relative to GDP to the ratio that prevailed prior to the crisis (Cogan et al, JEDC 2013). Specifically, we published an analysis of the macroeconomic consequences of the 2013 Budget Resolution that was passed by the U.S. House of Representatives in March 2012. In this note, we provide an update of our research that evaluates this year’s budget reform proposal that is to be discussed and voted on in the House of Representative in March 2013. Contrary to the views voiced by critics of fiscal consolidation, we show that such a reduction in government purchases and transfer payments can increase GDP immediately and permanently relative to a policy without spending restraint. Our research makes use of a modern structural model of the economy that incorporates the long-standing essential features of economics: opportunity costs, efficiency, foresight and incentives. GDP rises because households take into account that spending restraint helps avoid future increases in tax rates. Lower taxes imply less distorted incentives for work, investment and production relative to a scenario without fiscal consolidation and lead to higher growth

Fiscal consolidation strategy : [Version 21 September 2012]

In the aftermath of the global financial crisis and great recession, many countries face substantial deficits and growing debts. In the United States, federal government outlays as a ratio to GDP rose substantially from about 19.5 percent before the crisis to over 24 percent after the crisis. In this paper we consider a fiscal consolidation strategy that brings the budget to balance by gradually reducing this spending ratio over time to the level that prevailed prior to the crisis. A crucial issue is the impact of such a consolidation strategy on the economy. We use structural macroeconomic models to estimate this impact focussing primarily on a dynamic stochastic general equilibrium model with price and wage rigidities and adjustment costs. We separate out the impact of reductions in government purchases and transfers, and we allow for a reduction in both distortionary taxes and government debt relative to the baseline of no consolidation. According to the model simulations GDP rises in the short run upon announcement and implementation of this fiscal consolidation strategy and remains higher than the baseline in the long run. We explore the role of the mix of expenditure cuts and tax reductions as well as gradualism in achieving this policy outcome. Finally, we conduct sensitivity studies regarding the type of model used and its parameterization

Fiscal consolidation strategy

In the aftermath of the global financial crisis and great recession, many countries face substantial deficits and growing debts. In the United States, federal government outlays as a ratio to GDP rose substantially from about 19.5 percent before the crisis to over 24 percent after the crisis. In this paper we consider a fiscal consolidation strategy that brings the budget to balance by gradually reducing this spending ratio over time to the level that prevailed prior to the crisis. A crucial issue is the impact of such a consolidation strategy on the economy. We use structural macroeconomic models to estimate this impact focussing primarily on a dynamic stochastic general equilibrium model with price and wage rigidities and adjustment costs. We separate out the impact of reductions in government purchases and transfers, and we allow for a reduction in both distortionary taxes and government debt relative to the baseline of no consolidation. According to the model simulations GDP rises in the short run upon announcement and implementation of this fiscal consolidation strategy and remains higher than the baseline in the long run. We explore the role of the mix of expenditure cuts and tax reductions as well as gradualism in achieving this policy outcome. Finally, we conduct sensitivity studies regarding the type of model used and its parameterization

New Keynesian versus old Keynesian government spending multipliers

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modelling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large. JEL Classification: C52, E62fiscal multiplier, Fiscal Stimulus, government spending, Macroeconomic Modeling, New Keynesian Model

Aortic Coarctation: Recent Developments in Experimental and Computational Methods to Assess Treatments for this Simple Condition

Coarctation of the aorta (CoA) is often considered a relatively simple disease, but long-term outcomes suggest otherwise as life expectancies are decades less than in the average population and substantial morbidity often exists. What follows is an expanded version of collective work conducted by the authors\u27 and numerous collaborators that was presented at the 1st International Conference on Computational Simulation in Congenital Heart Disease pertaining to recent advances for CoA. The work begins by focusing on what is known about blood flow, pressure and indices of wall shear stress (WSS) in patients with normal vascular anatomy from both clinical imaging and the use of computational fluid dynamics (CFD) techniques. Hemodynamic alterations observed in CFD studies from untreated CoA patients and those undergoing surgical or interventional treatment are subsequently discussed. The impact of surgical approach, stent design and valve morphology are also presented for these patient populations. Finally, recent work from a representative experimental animal model of CoA that may offer insight into proposed mechanisms of long-term morbidity in CoA is presented

Inverse Scattering and Acousto-Optic Imaging

We propose a tomographic method to reconstruct the optical properties of a highly-scattering medium from incoherent acousto-optic measurements. The method is based on the solution to an inverse problem for the diffusion equation and makes use of the principle of interior control of boundary measurements by an external wave field.Comment: 10 page

Configurations and relative efficiencies of shrimp trawls employed in southeastern United States waters

Common shrimp trawl designs employed in the southeastern United States shrimp fishery are the flat, balloon, semiballoon, jib, and super X-3. Recent innovations in trawl design and rigging, including the twin trawl rigging and tongue trawl design, have improved the efficiency of shrimp trawling gear. A description of the construction techniques for the different designs indicate differences which affect gear performance. Measurements of horizontal spread and vertical opening for 76 trawl configurations indicate the relative efficiencies of the different designs. Maximum horizontal spreading efficiency was achieved by the "twin" and "tongue" trawl designs followed by the super X-3, jib, balloon, and semiballoon designs. Designs having the greatest vertical openings were the tongue and flat trawl designs followed by the semiballoon. Maximum total gape dimension was demonstrated by the "Mongoose" tongue trawl. Comparison of trawl spreading efficiency and door area to headrope length ratio indicates that a range of 70-80 in square (per door) of door area is required for each foot of trawl headrope length for maximum efficiency with conventional trawl designs and 66-75 in square per foot of headrope for tongue trawl designs. (PDF file contains 18 pages.

Enumerating the Aboriginal population of remote Australia: Methodological and conceptual issues

Despite claims of underenumeration of Indigenous people, a basic problem in establishing the demography of remote Indigenous populations remains the lack of well documented and adequately controlled independent checks against census data. This paper attempts to provide such verification by comparing population counts and age distributions from the last two ABS enumerations of the Aboriginal population of Aurukun, Cape York Peninsula, with the results of detailed ethnographic surveys of the same population. Significant undercount of young adults and children is noted. Consideration of the ethnographic realities of remote Indigenous communities indicates methodological and conceptual deficiencies in the current ABS remote area enumeration strategy and a number of strategies for addressing these issues are proposed