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Argentina's government has resorted to fiscal policy as a countercyclical tool to mitigate the negative impact of the current economic downturn on aggregate demand. Empirical results based on a vector error correction model suggest, however, that the fiscal multiplier is relatively small and short-lived. This could reflect a number of factors, including the higher propensity of households to save during the economic downturn, the implementation lag of public expenditures, particularly of capital expenditures, and the narrow tax base that limits the impact of countercyclical revenue measures on domestic demand.

Auction --- Bids --- Credit lines --- Debt Markets --- Economic Stabilization --- Economic Theory & Research --- Emerging economies --- Emerging Markets --- Expenditures --- Finance and Financial Sector Development --- Financial crisis --- Fiscal Adjustment --- Fiscal policies --- Fiscal policy --- Income tax --- Infrastructure investment --- International bank --- Liquidity --- Liquidity constraints --- Macroeconomics and Economic Growth --- Pension --- Pension funds --- Private Sector Development --- Return --- Safety nets --- Tax --- Tax collection --- Time deposits

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In 2011 the Government of El Salvador implemented a reform to the gas subsidy that increased the welfare of households in all but the top two deciles of the income distribution. However, the reform turned out to be rather unpopular, especially among winners. This paper relies on ad hoc household surveys conducted before the implementation and in the following two and a half years to test which factors help explain the puzzle. The analysis uses probit and logit models to show that misinformation (a negativity bias by which people with limited information inferred negative consequences), mistrust of the government's ability to implement the policy, and political priors explain most of the (un)satisfaction before implementation. Perceptions improved gradually-and significantly so-over time when the subsidy reception induced households to update their initial priors, although political biases remained significant throughout the entire period. The results suggest several implications with respect to policy reforms in cases where agents have limited information.

Children and Youth --- E-Business --- Economic Theory & Research --- Fuel Subsidy --- Industry --- Macroeconomics and Economic Growth --- Negativity Bias --- Political Economy Of Reforms --- Private Sector Development --- Social Development --- Social Protections and Labor --- Taxation & Subsidies --- Technology Industry

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Soaring commodity prices in 2007 and 2008 raised concerns that volatility was also rising, which would have implications for welfare and therefore for the design of public policy interventions. The literature focuses on trends in commodity prices rather than their volatility characteristics. This paper contributes by examining commodity price volatility with a newly compiled monthly panel dataset on 45 individual commodity prices from the end of the 18th century until today. The main conclusions are: the timing and number of breaks in volatility vary considerably across individual commodities, cautioning against generalizations based on the use of commodity price indices; the three most significant breaks common to most commodities are the two world wars and the collapse of the Bretton-Woods system; and structural breaks marking increased price volatility are followed by breaks marking declines in volatility so that there is no upward or downward trend in volatility over time.

Access to Markets --- Change in volatility --- Commodities --- Commodities price --- Commodity --- Commodity price indices --- Economic Conditions and Volatility --- Emerging Markets --- Higher volatility --- International Economics and Trade --- Macroeconomics and Economic Growth --- Markets and Market Access --- Price changes --- Price indices --- Price volatility --- Private Sector Development --- Public policy --- Volatilities