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Development Bank of Japan Research Series

Procyclical Fiscal Policy

Authors: Ihori, Toshihiro, Kameda, Keigo

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  • Develops a new and plausible explanation as to why and when governments should control the budget deficits procyclically
  • Empirically shows how democratic economies whose government functions weakly should adopt procyclical fiscal policies
  • Provides a worm-eye, in-country analysis of Japan and shows that procyclical analysis should be adopted in rural areas
  • Presents a comprehensive review of the recent discussion of fiscal cyclicality
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eBook 46,00 €
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  • ISBN 978-981-13-2995-1
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About this book

Conventional wisdom dictates that a fiscal policy should be counter-cyclical. However, contrary to this conventional views, recent research has demonstrated that fiscal policy is actually procyclical in most developing countries. In this book, we attempt to propose a new interpretation of this procyclicality after reviewing theoretical and empirical evolution of the research. In particular, by incorporating the political effort behavior of private agents into a weak government model, we explore how income fluctuations affect the optimal budget deficits in a political economy. If the government can control the political behavior, normally, the optimal budget deficit should rise in a recession as a first-best case; however, interestingly, a recession does not necessarily prompt an increase in the budget deficits in a second-best political economy. The response of the budget deficits to income fluctuations mainly depends on the efficiency of political effort, which may correspond to the degree of democracy and bureaucratic efficiency of the governments. We test the prediction of the pro-cyclical fiscal policy and find it applicable for democratic countries with semi-efficient governments including Japan.

About the authors

Toshihiro Ihori is a special professor of economics at the National Gradual Institute for Policy Studies and a professor emeritus of The University of Tokyo. He is an Academic Advisor of the Research Institute of Capital Formation, Development Bank of Japan. He has a B.A. and a M.A. from The University of Tokyo and a Ph.D. in economics from Johns Hopkins University. His major field of research is public economics. Details are at the web site of the  National Gradual Institute for Policy Studies.

Keigo Kameda is a Professor of Economics at School of Policy Studies, Kwansei Gakuin University. His main areas of research are public finance and macroeconomic policies. Born in 1970, Prof. Kameda received a Bachelor’s degree in Economics at Keio University in 1993 and a Ph.D. in Economics at Keio University in 2014. He was appointed Professor of Economics at School of Policy Studies, Kwansei Gakuin University in 2015.

Table of contents (3 chapters)

Table of contents (3 chapters)

Buy this book

eBook 46,00 €
price for Spain (gross)
  • ISBN 978-981-13-2995-1
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Softcover 57,19 €
price for Spain (gross)
  • ISBN 978-981-13-2994-4
  • Free shipping for individuals worldwide
  • Immediate ebook access, if available*, with your print order
  • Usually dispatched within 3 to 5 business days.
  • The final prices may differ from the prices shown due to specifics of VAT rules
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Bibliographic Information

Bibliographic Information
Book Title
Procyclical Fiscal Policy
Authors
Series Title
Development Bank of Japan Research Series
Copyright
2018
Publisher
Springer Singapore
Copyright Holder
Development Bank of Japan
eBook ISBN
978-981-13-2995-1
DOI
10.1007/978-981-13-2995-1
Softcover ISBN
978-981-13-2994-4
Series ISSN
2367-0967
Edition Number
1
Number of Pages
XIII, 68
Number of Illustrations
10 b/w illustrations, 9 illustrations in colour
Topics

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