This study tests the hypothesis that balanced-budget rules (BBRs) that restrict public borrowing to investments in public infrastructure increase growth by increasing the productivity of debt, either because investments in public infrastructure are more productive than other uses for which...

The paper provides an alternative explanation for the “resource curse” based on the income effect resulting from high government current spending in resource rich economies. Using a simple life cycle framework, we show that private investment in the non-resource sector is adversely affected...

Poverty and inequality around the world has been rising over the last three decades and the attainment of the Millennium Development Goals (MDGs) seems a far fetched goal. In explaining underdevelopment, Classical Economics has offered many theories and models including but not limited to...

This article analyses the redistributive efficiency of public spending and taxation in a panel of both advanced and developing economies during the last three decades (1984-2012). In order to explore how redistribution is achieved through fiscal policies, a two-stage approach is applied. First,...

The purpose of this paper is twofold. First, it presents a very concise way of measuring fiscal stance. This procedure is based on the assumption that the ‘neutral change’ in the government budget can best be simulated with a long-term approximation of the underlying trend of total output....

In October 2008 the main Hungarian public finance actors: the government, the National Bank of Hungary (MNB) and experts cited the high public debt and volume of unsecured foreign-currency loans as the main reasons for the economy’s vulnerability. On the other hand according to the formal...

In this paper, we model - quantitatively – a possible realistic interaction between a tax-payer and his Government. We formalize, in a general setting, this strategic interaction. Moreover, we analyze "completely" a particular realistic sample of the general model. We determine the entire...

The paper attempts to empirically explore the transmission mechanism regarding the short-term impact of public debt and growth. We examine and evaluate the direct effect of higher indebtedness on economic growth for countries in the EU which are in the epicentre of the current sovereign debt...

This paper analyses the issue of the dynamics of the TARGET2 system balances during the sovereign debt crisis. The development of these balances reflects the change in the distribution of the monetary base among the EMU Member States. During the sovereign debt crisis, while some countries, among...

The aim of this study is to develop a new framework (V-L-D) for detecting the short term vulnerabilities in fiscal policy for the European Union countries. The methodology relies ontwo distinct indicators: one showing the vulnerabilities signalled by the size of the cyclically adjusted budget...