We investigate the interactions between countries of the discretionary component of national fiscal policies (i.e. the cyclically- and interest-adjusted part of fiscal policy), therefore observing and investigating the part of public spending and tax receipts on which governments keep full...

Debates on the appropriate response of fiscal policy to economic downturns, such as the debates on the merits of austerity measures in Europe, have been centered on the size of the fiscal multipliers. Indeed, empirical and theoretical evidence suggests larger multipliers at times of recession...

We develop a medium-sized annual macroeconometric model of the Italian economy. The theoretical framework is the usual AS/AD model, where the demand side is specified along Keynesian lines, and the supply side adopts a standard neoclassical technology, with Harrod neutral technological progress....

This paper argues that the European Union has gone farther than any other country or institution in internalizing the prescriptions of the Washington Consensus.Embedding neo-liberal principles in the treaties defining its governance,the EU has enshrined a peculiar doctrine within its...

In the present work we investigate how the state of credit markets non-linearly affects the impact of fiscal policies. We estimate a Threshold Vector Autoregression (TVAR) model on U.S quarterly data for the period 1984-2010. We employ the spread between BAA-rated corporate bond yield and...

The paper by Kawalec and Pytlarczyk (2012) (henceforth, K-P), and the shorter “European Solidarity Manifesto” (http://european-solidarity.eu/; henceforth, ESMA), address two different set of questions. (1) Should the Euro be dismantled? What is the origin of the Eurozone (EZ) depression? Is...

This paper employs fifteen dynamic macroeconomic models maintained within the European System of Central Banks to assess the size of fiscal multipliers in European countries. Using a set of common simulations, we consider transitory and permanent shocks to government expenditures and different...

This paper analyzes the direct and indirect effects of fiscal policy on total factor productivity (TFP) in a panel of OECD countries over the period 1970-2012. Our contribution is twofold. First, when estimating the impact of fiscal policy on TFP from a production function approach, we identify...

In this paper we use recent developments on threshold autoregressive (TAR) models that allow us to derive endogenously threshold effects in the evolution of the Spanish budget deficit. Specifically, a mean-reverting dynamic behaviour of the budget deficit should be expected once such threshold...

In this paper we re-examine the long-run sustainability of budget deficits, when fiscal policy is conducted as a nonlinear process. Our empirical methodology makes use of recent developments on threshold cointegration that consider the possibility of a nonlinear relationship between government...