The question of reducing public debt is at the heart of the current debates in France where the level of debt ratio amounted to 86% of the GDP in 2011. In this paper, we examine how the primary balance, the GDP growth rate, the real interest rate and the inflation rate have influenced the...

Can the evolution of public debt be predicted from its determinants? While the recovery programs undertaken during the 2008 crisis have led to a big takeoff in public debt ratios, the factors likely to curb its upward spiraling dynamic are subject to considerable uncertainty and fuel debate...

Railways were one of the main engines of the Latin American trade boom before 1914. Railway construction often required financial support from local governments, which depended on their fiscal capacity. But since the main government revenues were trade-related, this generated a two-way feedback...

The paper characterizes the optimal tax scheme in an open economy with structural inefficiencies on the labor market and on government size. On analytical grounds first, we show that the economy can use fiscal revaluation to exploit the terms of trade externality and to dampen the impact of an...

The unprecedented tax hikes implemented in Greece in 2010 generated a much lower than expected increase in tax revenues. In this paper, we document a new stylized fact explaining this gap: the strong increase of tax evasion. We then analyze the response of the economy to tax hikes in a stylized...

This paper examines issues related to the estimation of the government spending multiplier (GSM) in a Dynamic Stochastic General Equilibrium context. We stress a potential source of bias in the GSM arising from the combination of Edgeworth complementarity/substitutability between private...

In this paper we assess the impact of commodity price volatility on tax revenues, while existing works were concentrated on its effect on economic growth. Our empirical analysis is carried out on 80 developing countries over 1980-2008. We compute country-specific indices which measure the...

In this paper, we assess the impact of fiscal consolidation on income inequality. Using a panel of 18 industrialized countries from 1978 to 2009, we find that income inequality significantly rises during periods of fiscal consolidation. In addition, while fiscal policy that is driven by spending...

This paper studies the local dynamic properties of a simple general equilibrium model with Social VAT. Strict balanced budget rules often lead to real indeterminacy of aggregate equilibrium, leaving room for «sunspots» fluctuations. In a closed-economy setup, social VAT escapes this property...

This article analyses the impact of the electoral calendar on the composition of tax revenue (direct versus indirect taxes). It thus represents an extension of traditional political budget-cycle analyses assessing the impact of elections on overall revenue. Panel data from 56 developing...