Fiscal Theory and Policy

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