In this study, we analyze the cyclicality of fiscal policies in China during the period 1978-2013. We find that the cyclicality of local government spending in China significantly affects the cyclicality of total government spending. By employing both time-series and province-level panel data,...

We analyze how the combined effect of automatic stabilizers and discretionary changes in taxbenefit systems have affected the cushioning of income shocks in the Euro zone and the EU-27 in the period 2007-2014. We propose a new summary measure of the combined effect of automatic stabilizers and...

The 'starving the beast' hypothesis claims that tax cuts lead to lower public spending, rather than higher debt levels and higher taxes in the future. This paper uses the institutional setting of German fiscal federalism to its advantage in order to explore how fiscal policy reacts to exogenous...

On 3 June 2020, the German government announced a temporary value added tax (VAT) rate reduction. VAT rates were reduced on 1 July 2020 and went back to their previous level on 1 January 2021. We study the price effects of the temporary VAT rate reduction using a web-scraped data set covering...

We analyze different options for the design of a common unemployment insurance system for the euro area (EA). We assess their effectiveness to act as an insurance device in the presence of asymmetric macroeconomic shocks. Running counterfactual simulations based on micro data for the period...

The COVID-19 pandemic has led to an increase in public debt in most countries. This will increase fiscal pressure in the future. We study how the shape of the optimal nonlinear income tax schedule is affected by this increase. We calibrate the workhorse optimal income tax model to five European...

The size and maturity structure of the government debt market have important implications for monetary policy, especially in EMEs. This paper documents the remarkable growth of the market over the past decade in terms of size, issuance and maturity structure of combined government and central...

Central bank balance sheets in emerging Asia have been expanding rapidly for the past decade, driven primarily by the accumulation of foreign exchange reserves. Some of the expansion reflects efforts to increase the buffer stock of reserves in the aftermath of the 1997–98 Asian Financial...

Central bank balance sheets have been expanding rapidly over the past decade in emerging Asia, due to the unprecedented rise in foreign reserve assets. We outline the changes in the composition of both assets and liabilities on central bank balance sheets in the region, and the factors that have...