To analyse the most important aspects of the Secular Stagnation hypothesis, this paper considers the effects of hysteresis in potential output in a New-Keynesian model that is extended with endogenous potential output. To do so, a number of simulations of relevant scenarios is undertaken. It is...

This paper studies the design, effects and interactions of monetary and fiscal policies in the euro-area and between the euro-area and the non euro-area. To do so, a stylized three-country model of monetary and fiscal policy rules is constructed. It is analyzed how monetary and fiscal rules...

A fiscal shock due to a shift in taxes or in government spending will, at some point in time, constrain the future path of taxes and spending, since the government's intertemporal budget constraint will eventually have to be met. This simple fact is surprisingly overlooked in analyses of the...

A fiscal shock due to a shift in taxes or in government spending will, at some point in time, constrain the future path of taxes and spending, since the government’s intertemporal budget constraint will eventually have to be met. This simple fact is surprisingly overlooked in analyses of the...

This paper analyses Greek fiscal sustainability from a retrospective and a prospective view. Implications of Greek fiscal (un)sustainability are discussed. In the empirical analysis econometric testing of Greek government solvency during the period 1985-2008 is combined with a scenario analysis...