The initial government debt-to-GDP ratio and the government's commitment play a pivotal role in determining the welfare-optimal speed of fiscal consolidation in the management of a debt crisis. Under commitment, for low or moderate initial government debt-to-GPD ratios, the optimal consolidation...

We build a factor-augmented interacted panel vector-autoregressive model of the Euro Area (EA) and estimate it with Bayesian methods to compute government spending multipliers. The multipliers are contingent on the overall monetary policy stance, captured by a shadow monetary policy rate. In the...

We revisit the empirical relationship between private/public debt and output, and build a model that reproduces it. In the model, the government provides financial assistance to credit-constrained agents to mitigate deleveraging. As we observe in the data, surges in private debt are potentially...

We compute government spending multipliers for the Euro Area (EA) contingent on the interestgrowthdifferential, the so-called r-g. Whether the fiscal shock occurs when r-g is positive or negativematters for the size of the multiplier. Median estimates vary conditional on the specification, but...

This paper studies how fiscal policy affects loan market conditions in the US. First, itconducts a Structural Vector-Autoregression analysis showing that the bank spread respondsnegatively to an expansionary government spending shock, while lending increases. Second,it illustrates that these...