114-0344/03 – Fiscal Theory and Policy (FTP)
| Gurantor department | Department of Economics | Credits | 4 |
| Subject guarantor | Ing. Lenka Johnson Filipová, Ph.D. | Subject version guarantor | Ing. Tomáš Wroblowský, Ph.D. |
| Study level | undergraduate or graduate | Requirement | Choice-compulsory |
| Year | 1 | Semester | winter |
| | Study language | Czech |
| Year of introduction | 2011/2012 | Year of cancellation | 2013/2014 |
| Intended for the faculties | EKF | Intended for study types | Follow-up Master |
Subject aims expressed by acquired skills and competences
Student should be able to:
-assess the efficiency of governments fiscal measures
-compare the theoretical approaches to fiscal imbalance
-estimate the impact of fiscal variables' changes on other macro variables
-design measures for improving the situation of public finance
Teaching methods
Lectures
Seminars
Summary
The course provides a comprehensive review of fiscal theory since the end of
WWII. It is aimed on fiscal policy efficiency in the neo-Keynesian IS-LM and
IS- LM-BP models, attention is also paid to fiscal aspects of new classical
macroeconomics and new Keynesian economics. The course also contains topics
that are not usually tought in intermediate courses of macroeconomics. These
are, for example, the Ricardian equivalence theorem, fiscal federalism or
fiscal theory of price level.
Compulsory literature:
Recommended literature:
Additional study materials
Way of continuous check of knowledge in the course of semester
Students have to prepare for the seminars. They must write thir homework papers, which are then discussed within seminars.
E-learning
Other requirements
There are no additional requirements.
Prerequisities
Subject has no prerequisities.
Co-requisities
Subject has no co-requisities.
Subject syllabus:
1. FISCAL POLICY IN CLOSED ECONOMY – THE IS-LM ANALYSIS
- Crowding-out effect of government purchases
- Fiscal policy multiplier
- Interaction of monetary and fiscal policy in the IS-LM model
2. FISCAL POLICY IN OPEN ECONOMY – THE IS-LM-BP ANALYSIS
- Efficiency of fiscal policy in alternative exchange rate regimes
- Efficiency of fiscal policy in alternative levels of capital mobility
3. BUDGET DEFICIT AND ITS MEASUREMENT
- budget deficit – its possible causes and consequences
- Structural and cyclical deficit and their measurement
- Alternative measures of fiscal imbalance
4. THEORY OF GOVERNMENT DEBT
- Government debt, its causes and consequences
- Domestic debt and its consequences.
- Foreign debt and its consequences
5. RICARDIAN EQUIVALENCE.
- Debt and taxes as equivalent methods of financing government expenditures
- Permanent income – life cycle hypothesis application, interteporal choice
- Ricardian equivalence and economic policy
6. FISCAL ASPECTS OF SUPPLY SIDE ECONOMICS
- Theory of incentives (P. C. Roberts).
- Theory of Laffer curve
- Fiscal experiments in the 80’s (M. Thatcher, R. Reagan) and their results
7. THEORY AND EMPIRY OF FISCAL FEDERALISM
- Neokeynesian conception of fiscal federalism (R. Musgrave).
- W. Oates‘ approach of fiscal federalism
- Fiscal policy in integrating Europe (EU, EMU).
8. INTERACTION OF MONETARY AND FISCAL POLICY.
- Fiscal aspects of monetary policy
- Seigniorage as a source of budget revenues
- Intertemporal budget constraint and „weak version“ of fiscal theory of price level
9. LONG-RUN SUSTAINABILITY OF PUBLIC FINANCE
- Demographic changes and fiscal sustainability
- Role of mandatory expenditures in public finance
Conditions for subject completion
Occurrence in study plans
Occurrence in special blocks
Assessment of instruction