Category

Number of Access this item:1,673（2024-05-14 04:33 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/10086/18920

Link to primary information 

File Format Size Views Description
cover_18920 pdf
IFD_WP70 pdf 385 KB 1,204

Item Information

Output File

Title
Fiscal Policy Switching in Japan, the U.S., and the U.K.
Creator
Creator Name
Ito, Arata Ito, Arata
Affiliation
Affiliation Name
Hitotsubashi University
Creator Name
Watanabe, Tsutomu Watanabe, Tsutomu
渡辺, 努 渡辺, 努
Affiliation
Affiliation Name
Hitotsubashi University
Creator Name
Yabu, Tomoyoshi Yabu, Tomoyoshi
Affiliation
Affiliation Name
Keio University
Editor
Contributor Name
日本経済の物価変動ダイナミクスの解明 = Understanding Inflation Dynamics of the Japanese Economy
Affiliation
Affiliation Name
Hitotsubashi University
Key Word
fiscal policy rule
fiscal discipline
Markov-switching regression
JEL
E62
Abstract
This paper estimates fiscal policy feedback rules in Japan, the United States, and the United Kingdom for more than a century, allowing for stochastic regime changes. Estimating a Markovswitching model by the Bayesian method, we find the following: First, the Japanese data clearly reject the view that the fiscal policy regime is fixed, i.e., that the Japanese government adopted a Ricardian or a non-Ricardian regime throughout the entire period. Instead, our results indicate a stochastic switch of the debt-GDP ratio between stationary and nonstationary processes, and thus a stochastic switch between Ricardian and non-Ricardian regimes. Second, our simulation exercises using the estimated parameters and transition probabilities do not necessarily reject the possibility that the debt-GDP ratio may be nonstationary even in the long run (i.e., globally nonstationary). Third, the Japanese result is in sharp contrast with the results for the U.S. and the U.K. which indicate that in these countries the government’s fiscal behavior is consistently characterized by Ricardian policy.
Publisher
Research Center for Price Dynamics, Institute of Economic Research, Hitotsubashi University
Issued Date
2011-02
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Working Paper Series ; No. 70
Relation
Related Identifier
URI
  http://www.ier.hit-u.ac.jp/~ifd/
Number of Pages
70
Sponsorship
学術創成研究費 = Grant-in-Aid for Creative Scientific Research
Appears in Collections
Working Paper Series / Understanding Inflation Dynamics of the Japanese Economy
URL
https://hdl.handle.net/10086/18920