Fiscal foresight and information flows /

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Bibliographic Details
Author / Creator:	Leeper, Eric Michael, author.
Imprint:	[Washington, D.C.] : International Monetary Fund, ©2012.
Description:	1 online resource (65 pages)
Language:	English
Series:	IMF working paper ; WP/12/153 IMF working paper ; WP/12/153.
Subject:	Taxation. Fiscal policy. Economic forecasting. Information theory in economics. Economic forecasting. Fiscal policy. Information theory in economics. Taxation.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12500264

Hidden Bibliographic Details
Other authors / contributors:	Walker, Todd B. (Todd Bruce), author. Yang, Shu-Chun Susan, 1971- author. International Monetary Fund. Research Department, issuing body.
ISBN:	1475504357 9781475504354 1475558244 9781475558241 9781475504354 9781475558241
Digital file characteristics:	text file
Notes:	Includes bibliographical references.
Summary:	News - or foresight - about future economic fundamentals can create rational expectations equilibria with non-fundamental representations that pose substantial challenges to econometric efforts to recover the structural shocks to which economic agents react. Using tax policies as a leading example of foresight, simple theory makes transparent the economic behavior and information structures that generate non-fundamental equilibria. Econometric analyses that fail to model foresight will obtain biased estimates of output multipliers for taxes; biases are quantitatively important when two canonical theoretical models are taken as data generating processes. Both the nature of equilibria and the inferences about the effects of anticipated tax changes hinge critically on hypothesized information flows. Different methods for extracting or hypothesizing the information flows are discussed and shown to be alternative techniques for resolving a non-uniqueness problem endemic to moving average representations.
Other form:	9781475504354 9781475558241

Table of Contents:

Cover; Contents; I. Introduction; II. Analytical Example; A. The Econometrics of Foresight; B. Generalizations; III. Quantitative Importance of Foresight; A. Modeling Information Flows; B. Model Descriptions; C. Information Flows and Estimation Bias; IV. Solving the Problem; A. An Organizing Principle; B. Lines of Attack; 1. The Narrative Approach; 2. Conditioning on Asset Prices; 3. Direct Estimation of DSGE Model; V. Concluding Remarks; References; Tables; 1. Information Flow Processes; 2. Output Multipliers for a Labor Tax Change; Figures; 1. Responses of Capital to Tax Increase.
AppendicesI. Simulations Details; II. Testing Economic Theory; III. Municipal Bonds and Fiscal Foresight: Additional Results; IV. Assessing the Ex-Ante Approach.

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