Search results

This paper reexamines the relationship between budget deficits and exchange rates by applying Hakkio’s (1996) model to seven Asian countries and eight Euro‐currency countries over the years from 1951 to 2001. Applying the Time‐Series Cross‐Section Regression with the Seemingly Unrelated Regression approach to data from 15 countries, the results indicate that because of the indirect effect of the expected inflation rate, the risk premium, and the expected return rate, currency values are inversely related to budget deficits. However, the empirical results also present evidence supporting the Ricardian Equivalence Proposition that there is no direct effect of budget deficits on exchange rates.

This article surveys budgetary reforms in the Organization for Economic Cooperation and Development (OECD) countries, which have aimed both at reducing budget deficits and improving public sector performance.(1) It discusses the pressures giving rise to these reforms, recent trends in reducing deficits and the changes to budgetary processes adopted by various countries. Brief reference is also made to changes in expenditure programs. In some OECD Member countries, changes to budgetary processes have been part of an overall program of reform in public sector management. While there are differences of emphasis between countries, there is considerable convergence toward establishing new budgetary processes which have multi-year approach, provide for greater budgetary devolution to ministries and agencies and focus more on managing the performance of government organizations and programs.

The purpose of this paper is to analyze and understand the Rubinomics hypothesis or the argument that “fiscal discipline” will bring private investment to a growth path as a result of a decrease in real interest rates, during the 1990s in the USA.

The paper relies on a range of previously published works and macroeconomic data to test the Rubinomics hypothesis.

The paper concludes based on data from the experience of the US economy during the 1990s that the evidence does not validate the arguments of Rubinomics.

The “crowding‐out” debate is an important controversy in macroeconomics. By shedding light over this controversial issue, this paper shows that the US experience during the so‐called roaring 1990s, a period of extraordinary “fiscal discipline,” did not follow the classical crowding‐out hypothesis.

Among the many factors fueling the inflationary tendencies in an economy such as monetary shocks, structural shocks, demand shocks, external shocks and demographic changes, the issue of inflation (INF) has also been found to be related to fiscal policy decisions of the government. The purpose of this study is to investigate the inflationary tendencies in India particularly from the fiscal point of view. The study also examines the influence of other potential determinants such as output growth rate, interest rate, trade-openness (TO) and oil price inflation (OPI).

To examine the dynamic nature of association between fiscal deficit and inflation, the study applies the Toda-Yamamoto (1995) test and Breitung and Candelon (2006) test to investigate the nature of causality in time and frequency domain frameworks. In addition, to scrutinize the possibility of a long-run association, that too from an asymmetric point of view, the study applies a Non-linear Autoregressive Distributed lag model (NARDL) given by Shin et al. (2014). Finally, non-linear cumulative dynamic multipliers are used to trace the traverse between disequilibrium position of short-run and subsequent long-run equilibrium of the system.

The authors found a unidirectional causality from fiscal deficit to inflation in case of time domain analysis and no feedback causality is reported. However, in case of frequency domain design, causality from fiscal deficit to inflation is found at low frequencies only, i.e. no short-run causality is established and hence dynamic nature of the relationship between the two variables is vindicated. Using NARDL model, the results document the existence of an asymmetric long-run direct association between fiscal deficit and inflation. However, an increase in deficit is found to be more inflationary and a decrease affects the inflation with a lower magnitude. The asymmetric impact of fiscal deficit on inflation can be explained through the existence of liquidity constraints, consumption-investment downward inflexibility and the downward price stickiness. Contractionary monetary policy action is found to be more effective than an expansionary one, signifying the asymmetric influence of monetary policy actions on the inflation of India. Similarly, in a supply-constrained economy with downward price rigidity, the authors found an asymmetric impact of output growth and output decline on inflation. As regard to the trade-openness, although an asymmetry is reported, the signs refute the validation of Romer (1993) hypothesis. Finally, the impact of oil price inflation on the inflationary pressures is according to theory but the coefficients are devoid of statistical significance.

These results indicate some important policy recommendations. Fiscal consolidation strategy should be executed in an appreciable manner to achieve the sound fiscal health and lower INF. The disciplined fiscal strategy would also be imperative for an effective monetary policy. Monetary authorities should possess noticeable credibility to manage the macroeconomic system and policy stances should be implemented according to requirements of the economy. Growth in output should be encouraged to have two-fold benefits to the economy – reducing INF on the one hand and fiscal deficits on the other.

The study contributes to the existing literature in the following ways. First, taking note of dynamic nature of the relationship between these two variables, the study examined the deficit INF nexus in a dynamic and asymmetric framework. The novelty of the study is ensured by the very nature of it is the first study in case of India to identify the fiscal INF in an asymmetric configuration. The authors applied a NARDL model, given by Shin et al. (2014) to examine the existence of any cointegrating relationship in an asymmetric paradigm. Second, the nature of causality between fiscal deficit and INF has been examined in a time domain and FD framework to portray precisely the casual interactions between these two variables in the short-run and long run. The study will, therefore, enrich the existing literature along the asymmetric lines.

The purpose of this paper is to compare the impact of lean six sigma (LSS) implementation carried out in a pharmaceutical unit on the profitability of outpatient and inpatient care before and during the Covid-19 pandemic.

The data were analyzed descriptively to see the development patterns in four periods: before implementation, during the implementation before the pandemic, during the pandemic and during the enforcement of new normal, in general, and by the length of stay (LOS).

The inventory purchase in the pharmaceutical unit dramatically decreased after implementation even during the pandemic and new normal wherein the pre-pandemic it decreased by 27%, during the pandemic 29% and in the new normal 37% compared to pre-LSS. The hospital deficit decreased after implementation before the pandemic by 26% and during the pandemic by 10% from the pre-LSS time. However, during the new normal, the deficit increased by 29%, indicating a diminished effect of LSS on the hospital profits.

This research raised the possible implication that the implementation of LSS needed to be carried out in the entire hospital to have a large effect, especially on the inpatient care and long-term care installations.

This research provided empirical evidence regarding the effect of the Covid-19 pandemic on the ability of LSS at the unit level to provide efficiency at the unit level and the entire hospital at various levels of LOS.

The Institute for Supply Management recently declared that the cost savings and efficiencies to be gained through e‐Sourcing can provide benefits not only to individual entities that use them for the acquisition of goods and services, but in the aggregate, to the economy as a whole (Davies, 2002). This study examines the potential impact of strategic implementation of e‐Sourcing in public procurement in Southeast Asia. The results of the study demonstrate that the use of competitive bidding events, popularly known as reverse auctions, when used as part of an overall e‐Sourcing program, can have demonstrable economic and budgetary benefits. Using governmental data supplied by the Asian Development Bank and the World Bank and employing proven econometric methodologies, the study shows that their would be vast differences in Asian economies as a result of the effective use of competitive bidding events as part of an overall e‐Sourcing strategy. We conclude by presenting an action plan for implementing an e‐Sourcing strategy for acquisition practices.

The aim of the paper is to evaluate fiscal adjustments that have occurred in the Economic and Monetary Union (EMU) countries in the last 35 years, and their consequences on the economic growth process by using the mean group (MG) estimators.

Our emphasis is on the effects of different composition of fiscal stimuli and consolidations. We compare the effects on the economic growth rate of different compositions of major fiscal changes. We use a cyclically adjusted value of the fiscal variables to leave aside variations of the fiscal variables induced by business cycle fluctuations.

Our empirical research of the effects of large changes in fiscal policy, both in case of a fiscal consolidation and of fiscal stimulus in the 18 EMU countries from 1980 to 2015, shows that adjustments by cutting current expenditures, rather than by tax increases are more likely to boost economic growth. It also shows that cuts of investment expenditures may reduce GDP growth. During fiscal stimulus episodes, tax cuts and public investments are more likely to increase growth than current public expenditure.

This is the first study devoted to the EMU countries. It should be underlined that the results obtained as for EMU countries are not necessarily applicable to other countries, as the different government size as well as different market institutions may influence the results.