iv Abstract This thesis investigates the effects of government spend- ing on aggregate economic variables in the Czech Republic. The standard RBC and New Keynesian models assume only forward-looking households despite the evidence of a sig- nificant fraction of non-optimizing households. These mod- els do not provide reasonable predictions for the response of consumption: both models predict its fall following a gov- ernment spending shock. Therefore, a variant of the New Keynesian model, where rule-of-thumb households coexist with optimizing households, is used for the analysis. We have found that fiscal policy has a positive impact on output, although government spending multiplier does not exceed one. Also, the impact on consumption is positive for several periods following a fiscal spending shock, which is consistent with the evidence. JEL Classification: C32, E32, E62 Keywords: fiscal policy, fiscal multipliers, fiscal VAR, rule- of-thumb consumers

This thesis deals with short-term relationship between fiscal policy and the real economy. Thesis is divided into three thematic units. In the first part through the analysis of studies examining the size of fiscal multipliers concludes, that depending on the assumptions and selected time period is the size of the multipliers greater in economic recessions, at zero interest rates of central banks or bigger taciturnity of the economy. The multipliers for the Czech Republic are low and did not exceed the value of one. The thesis also analyzes the development of public finances in the years 1997 - 2013 and identifies as their basic problem the structural nature of deficits. As a possible tool to improve the inclination of public finance to the budget deficits are identified fiscal rules limiting public spending. This rule is fully compatible with the Stability and Growth Pact and meets the basic requirements - the clarity and flexibility.

The first essay explores the nature of the equilibria obtained when state governments conduct industrial policies to affect firms' location choices. The model differs from existing ones by considering industrial policy targeted at small firms. In a simple two-region, two-industry model with imperfection information, it is shown how regions attempt to attract firms from the neighbouring one, either by making cash or in-kind transfers. The model rationalizes the use of in-kind subsidies for incentive-compatibility reasons, even though they are valued less by firms than what they cost to provide. It allows to understand why regions with a smaller industrial base may pursue a more aggressive industrial policy. The model sheds some light on which industries are likely to be targeted by industrial policy, and how the means of income transfers could be selected. The objective of the second paper is to determine under which circumstances an industrial policy that seeks to increase the number of new technologically-based firms in the economy is best assigned to the central or regional governments in a federation. Even though a decentralized industrial policy may be more flexible, it has the drawback that regions compete against each other to acquire successful firms. Because this margin is closed to a central government, it is likely to achieve a better outcome even if operating under "uniformity" constraints. The public policy implication is that this type of industrial policy should be transferred to the federal government. The third essay presents a new rationale for intergovernmental grants in a federation that arises strictly from the income redistribution concerns of the federal government. The central government seeks to redistribute income across agents, and behaves as a Stackelberg leader with respect to regional governments. Intergovernmental grants are needed to effect income redistribution while maintaining appropriate expenditure levels. Differentiated grants allow in some circumstances to implement a "third-best" solution when nominal prices differ across regions. They allow the federal government to affect provincial tax rate and public good provision, thus complementing the income redistribution done directly through the federal income tax system. / Arts, Faculty of / Vancouver School of Economics / Graduate

M.Comm. / That there has been a revolution in intergovernmental fiscal relations system is undeniable. The political and constitutional transformation that took place in South Africa has not gone unnoticed in the civil society, and certainly not in the international world affairs. After a period close to a decade of democratic system of governance in South Africa, the time is more than ripe to do a comprehensive review of intergovernmental fiscal relations. Given the variety of demands and pressures on the system, both from policy and from a constitutional point of view, it is important to reflect on the performance of the system in a manner that prepares it for future challenges. Provinces are no longer merely spending agencies for central government. Instead, they have been empowered by the Constitution to fashion their own policy priorities in certain areas and to translate these into resource allocations that will support these policy objectives. The focus of this study is to critically evaluate the South African intergovernmental grant system since 1994, noting the changes, successes and challenges that constitute future areas of improvement. The results can be used by other policy analysts, managers and can also constitute the basis for future research.

abstract

Charla para conocer los efectos para el cierre tributario de las empresas post covid del año 2020, por la empresa Auditora Deloitte.

Charla para conocer los efectos para el cierre tributario de las empresas post covid del año 2020, por la empresa Auditora PWC.

<p> This thesis studies a number of issues in optimal fiscal and monetary policy using the Ramsey framework. Specifically, it focuses on the effects of learning-by-doing and organizational capital on optimal policy responses. The first essay investigates the optimal capital income taxation in presence of learning-by-doing effects. The main result is that the optimal tax rate on capital income is significantly positive in the long run even though the product market is imperfectly competitive. This finding contrasts with results obtained in the literature that the capital income tax should be zero if the product market is perfectly competitive and negative if the product market is imperfectly competitive. The second essay studies the effects of learning-by-doing, and price rigidities on the dynamic properties of optimal fiscal and monetary policy variables. The m~in result is that, contrary to the findings of other papers in this literature, optimal Ramsey inflation is very stable and persistent over the business cycle. A second important result is that optimal tax policy is counter-cyclical - tax rates fall during recession and rise during boom. This finding contrasts with pro-cyclical tax results obtained in standard sticky price Ramsey models. Finally, the third essay studies welfare maximizing fiscal and monetary policy rules in a model with sticky prices, learning-by-doing in the technology, and distortionary taxation. Specifically, it considers monetary feedback rules whereby the nominal interest rate is set as a function of 'output and inflation. The main finding is that the optimal interest-rate rules call for a very strong response to inflation and a very weak response to output. Also, the optimal interest-rate rules are forward looking. This result contrasts with the backward looking optimal interest rate rules obtained in the existing optimal policy literature. The optimized fiscal rule is passive in the sense that tax revenues increase only mildly in response to increases in government liabilities. The optimized regime yields a level of welfare that is very close to that implied by the Ramsey optimal policy. </p> / Thesis / Doctor of Philosophy (PhD)

Unfunded public pension and Other Post Employment Benefits (OPEB) liabilities impose major threats to local fiscal sustainability, which increases governments' default risk and crowds out funding for essential local services. To close the funding gaps, localities may apply a wide range of fiscal instruments, including increasing taxes, fees, and user charges, issuing debt and bonds, obtaining grants and/or decreasing expenditures. This research compares the US local fiscal choice behavior in the context of the fiscal federalism framework. The goal is to identify the ideal mix of constitutional fiscal rules to preserve local fiscal sustainability. Not only should the rules aim to minimize local adverse fiscal behavior pre-crisis, which may include excessive spending, large accumulations of unfunded liabilities, and over-reliance on external grants, but also allow strong local fiscal adaptive capacity post-crisis. The findings help localities identify any effective and prudent fiscal options available to close their pension funding gaps and contribute to the overall sub-national fiscal institutional reforms. Theoretically, this research introduces a novel analytical framework pertaining to local fiscal sustainability by separating pre-crisis and post-crisis institutional analysis and by consolidating two historically viewed as two competing paradigms, public choice and public finance. I argue that the two approaches are complementary rather than contradictory since public choice theory sets up an institutional prerequisite for normative outcomes to be realized and prevents the occurrence of extreme circumstances. The ideal mix of formal fiscal rules, thus, should induce the balanced budget rule that applies to all budget items, stringent spending and debt limits, and institutionalized local tax authority and stable tax structure, but not tax limits. Tax limits are less effective in constraining government than spending and debt limits due to fiscal gimmicks. Moreover, stringent tax limits could significantly limit local governments' ability to bounce back on their own. This research also found that cities do apply different fiscal strategies to reduce exogenous shocks, given their unique fiscal institutions in place. Furthermore, cities with fewer institutional constraints exhibit a faster speed of adjustment. However, certain institutional variables, such as public union size and tax authority, might not have the same fiscal implications as predicted by the theory. Cities often manage to cut their short-term spending regardless of the size of their public unions. A broad range of tax authority does not imply greater local revenue-generating capacity. Own source revenue autonomy might be a better indicator of local fiscal adaptive capacity. / Doctor of Philosophy / Unfunded public pension and Other Post Employment Benefits (OPEB) liabilities impose major threats to local fiscal sustainability, which increases governments’ default risk and crowds out funding for essential local services. To close the funding gaps, localities may apply a wide range of fiscal instruments, including increasing taxes, fees, and user charges, issuing debt and bonds, obtaining grants and/or decreasing expenditures. This research compares the US local fiscal choice behavior in the context of the fiscal federalism framework. The goal is to identify the ideal mix of constitutional fiscal rules to preserve local fiscal sustainability. Not only should the rules aim to minimize local adverse fiscal behavior pre-crisis, which may include excessive spending, large accumulations of unfunded liabilities, and over-reliance on external grants, but also allow strong local fiscal adaptive capacity post-crisis. The findings help localities identify any effective and prudent fiscal options available to close their pension funding gaps and contribute to the overall sub-national fiscal institutional reforms. Theoretically, this research introduces a novel analytical framework pertaining to local fiscal sustainability by separating pre-crisis and post-crisis institutional analysis and by consolidating two historically viewed as two competing paradigms, public choice and public finance. I argue that the two approaches are complementary rather than contradictory since public choice theory sets up an institutional prerequisite for normative outcomes to be realized and prevents the occurrence of extreme circumstances. The ideal mix of formal fiscal rules, thus, should induce the balanced budget rule that applies to all budget items, stringent spending and debt limits, and institutionalized local tax authority and stable tax structure, but not tax limits. Tax limits are less effective in constraining government than spending and debt limits due to fiscal gimmicks. Moreover, stringent tax limits could significantly limit local governments’ ability to bounce back on their own. This research also found that cities do apply different fiscal strategies to reduce exogenous shocks, given their unique fiscal institutions in place. Furthermore, cities with fewer institutional constraints exhibit a faster speed of adjustment. However, certain institutional variables, such as public union size and tax authority, might not have the same fiscal implications as predicted by the theory. Cities often manage to cut their short-term spending regardless of the size of their public unions. A broad range of tax authority does not imply greater local revenue-generating capacity. Own source revenue autonomy might be a better indicator of local fiscal adaptive capacity.

A proposta da tese é explorar como a interação entre abertura política, redemocratização e mudança no contrato social contribuíram para o aumento do tamanho do governo e do gasto no Brasil. Dessa forma, a tese sugere a persistência de um padrão de política fiscal que prevaleceu após a Constituição Federal de 1988, encontrado no governo central e nos governos subnacionais, cujo padrão é formado por: i) pressão pelo aumento do tamanho do governo; ii) crescimento da despesa corrente em relação ao investimento; iii) comportamento pró-cíclico do gasto e presença do efeito voracidade. A hipótese explorada na tese é que o padrão de política fiscal possui como origem o equilíbrio que emergiu com a abertura política e a redemocratização na década de 1980, onde foram incorporadas as demandas por bens públicos (educação, saúde, proteção social, por exemplo) e a maior ênfase pelas políticas redistributivas, oriundas do aprofundamento da democracia e da presença do sufrágio universal. Ao mesmo tempo, o equilíbrio sugere a necessidade de acomodar os grupos de interesse (elites empresariais e do funcionalismo público, por exemplo) que aparelham o estado e buscam defender e ampliar seus privilégios, especialmente em relação aos benefícios tributários, acesso aos recursos orçamentários e prioridade no direcionamento do gasto do governo. Assim, a viabilidade do equilíbrio depende do crescimento do tamanho do governo que serve para minimizar os conflitos entre grupos de interesse, também preservar a paz social e a estabilidade política. No entanto, o equilíbrio contribui para fortalecer a percepção de ilusão fiscal sobre as limitações e as restrições de curto e longo prazo que a política fiscal está submetida, eclipsando como são distribuídos os custos e os benefícios das ações do governo. A contribuição da tese é aprofundar a discussão sobre como o funcionamento de uma democracia iliberal (nova democracia ou democracia não consolidada) e a alteração no contrato social em um ambiente de instituições frágeis são capazes de influir sobre o tamanho do governo e o comportamento do gasto no curto e longo prazo. Além disso, a tese busca explorar quais seriam os problemas fiscais, as potenciais fragilidades, os canais e mecanismos de transmissão que relacionam uma democracia não consolidada e os problemas fiscais, tomando como estudo de caso a experiência brasileira. / The main objective of this thesis is to explore the interaction between the democratization process and change of social contract on government size and public spending in Brazil. The hypothesis of the thesis is the persistence of a fiscal policy pattern, present in both central government and subnational governments, composed of the following characteristics: i) increased pressure for increasing government size; ii) growth of current expenditure in relation to investment; and iii) procyclical and voracity effect. This fiscal policy pattern has its origin in the democratization process in the 1980s, with demands of society for public goods (education, health, social security, for example) and redistribution policies, stemming from the deepening of democracy and the presence of universal suffrage. Alongside, the emerging equilibrium suggests the need to accommodate interest groups (business elites and civil servant, for example) that equip the state and seek to defend and expand their privileges, especially in relation to tax benefits, access to budgetary resources and defense of priority in spending. So, the viability of this balance depends on the growth of government size that serves to minimize conflicts between interest groups, also preserving social and politics stability. However, the equilibrium contributes to strengthening the fiscal illusion about the short and long-term limitation of the budget and fiscal policy. The contribution of the thesis is to deepen the discussion about how the functioning of an illiberal democracy (or new democracy) and the change in the social contract in an environment of weak institutions can influence government size and the behavior of spending in the short and long term. In addition, the thesis seeks to explore what the fiscal problems, potential weaknesses and channels of transmission that relate to illiberal democracy and fiscal problems are, taking Brazil as a case study.