1 March 2013

Call for papers: "Economic Diplomacy and Economic Foreign Policies in the Time of Contractionary Fiscal Policies"

For a special issue of the International Journal of Diplomacy and Economy.

Contractionary fiscal policies are a form of fiscal policy in which a decrease in government expenditure is associated with an increase in taxes and decreases in transfer payments. The goal of contractionary fiscal policies is to correct the inflationary problems of a business-cycle expansion and close an inflationary gap, to restrain the economy and to decrease the inflation rate (AmosWEB Encyclonomic WEB*pedia, 2013).
Contractionary fiscal policies are usually supported by contractionary monetary policies associated with a decrease of money supply, increased interest rates, selling government securities in the open market, raising the discount rate and increasing reserve requirements (AmosWEB Encyclonomic WEB*pedia, 2013).
Contractionary fiscal policies are also known as “Fiscal Cliffs” that include automatic tax hikes and spending cuts. The US President is still putting a lot of pressure on congressional Republicans to head off budget cuts that are due to begin on 1 March, 2013 (Reuters, 19 Feb).
The US Congress considers contractionary fiscal policies to foster economic growth; proponents of this view argue that cutting spending rather than raising taxes would be a more effective means of increasing economic growth (Congressional Research Service, 2013).
During the days of the 2008 crises, money and capital markets seized up because banks were no longer willing to lend money to one another, and central banks worldwide had to make substantial decreases in interest rates and inject liquidity into banks. The downfall of financial markets had global macroeconomic consequences in the form of rising unemployment and falling growth prospects. It became clear early on that monetary policy instruments would be insufficient in curbing the meltdown of financial markets and stimulating economic growth (Midthjell, 2013). Contractionary fiscal policies are suggested as powerful mechanisms to close the inflationary gap.
As the debate between proponents and opponents of adopting contractionary fiscal policies has recently heated up, we are interested in observing the role played by economic diplomacy and economic foreign policies in this phenomenon. This topic is the focus of this special issue. Theoretical, research and case study as well as 'more practical’ papers are welcome.
Contractionary Fiscal Policy, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2013. [Accessed: February 2, 2013].
Congressional Research Service, 2013, 7-5700, www.crs.gov.
Nina Larsson Midthjell, 2013, Fiscal policy and financial crises – what are the, actual effects of fiscal policy?, Working Paper, Department of Economics, University of Oslo.
Suitable topics include but are not limited to:
  • Economic diplomacy and contractionary fiscal policies from the view of emerging economies
  • Economic diplomacy and contractionary fiscal policies from the view of developed economies
  • Contractionary fiscal policies and their impact on the foreign policies of countries
  • Contractionary fiscal policies and the role of heads of state
  • Contractionary fiscal policies of the bipolar world (where some parts of the world experience economic growth and others face recession) and the role of economic diplomacy in this framework
  • Contractionary fiscal policies and their impact on growth, exports, inflation and FDI
  • Contractionary fiscal policies and their impacts on financial markets
  • Contractionary fiscal policies and their social-economic impact on countries
Important Dates
Submission of abstracts (one page, max. 500 words) by email: 1 October, 2013
Notification of acceptance of abstracts: 15 November, 2013
Submission (online) of full papers following acceptance of abstracts: 1 April, 2014
Notification of acceptance, refusal or revisions required for full papers: 1 May, 2014
Submission of accepted and revised final papers: 1 July, 2014

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