In the context of the increasing budget deficit and public debt, on one hand, and the need to restore economic growth without compromising financial stability and fiscal sustainability on long term, on the other hand, governments must undertake severe measures concentrated especially on...

The Great Recession and the COVID-19 pandemic shared two of its critical macroeconomic consequences: a major increase in world uncertainty and great stress on public finances. In this paper, we show that not only these are not independent phenomena but, on the contrary, world economic...

We study the loss function of 15 European governments as implied by their budget balance forecasts. Results suggest that the shape of the loss function varies across countries. The loss function becomes more asymmetric as the forecast horizon increases and in advance of parliamentary election....