This note comments on two central issues for fiscal policy design in the UK, highlighted in the recent Code for Fiscal Stability' proposed by the new Labour government. The first concerns the merits of the so-called golden rule of public sector investment' -- the proposition that, over the...

The paper analyzes the modalities and consequences of a breakdown of cooperation between the monetary authorities of inflation-prone Periphery Countries that use an exchange rate peg as an anti- inflationary device, when the Center is hit by an aggregate demand shock. Cooperation in the...

This paper considers the effects of fiscal and financial policy on economic growth in open and closed economies, when human capital formation by young households is constrained by the illiquidity of human wealth. Both endogenous and exogenous growth versions of the basic OLG model are analyzed....

Are generational accounts informative about the effect of the budget on the intergenerational distribution of resources and (when augmented with generation-specific propensities to consume out of life-time resources) on aggregate consumption and saving? The paper makes three points. First, the...

The paper analyzes the role of differences in household behavior as a source of persistent and even permanent differences between national or regional productivity growth rates, when there are constant static returns to scale in production and costless international diffusion of technology. A...

We investigate how the ability of the government to depart from budget balance and issue debt expands the set of equilibria that can be supported using lump-sum tax-transfer instruments. We show how this depends on the restrictions that exist on the capacity to tax and make transfer payments,...

The paper develops a two-country endogenous growth model to investigate possible causes for the existence and persistence of productivity growth differentials between nations despite a common technology, constant returns to scale and perfect international capital mobility. Private consumption is...