study the effects of fiscal shocks keeping track of the debt dynamics that arises following a fiscal shock, and allowing for … the possibility that taxes, spending and interest rates might respond to the level of the debt, as it evolves over time …. We show that omitting a debt feedback can result in incorrect estimates of the dynamic effects of fiscal shocks. In …

We analyse different forms of international debt mutualisation in a simple framework with a political distortion and … (partial) default under adverse economic circumstances. One form is a debt repayment guarantee, which can be "unlimited" or …, under which blue debt is guaranteed by the other countries in a union, while red debt is not guaranteed. Only a suitably …

forecast of its future debt liabilities, and its potential to use tax policy to repay these. We use this measure to calculate … credit ratings for fourteen European countries over the period 1995-2012. This measure identifies a European sovereign debt …

that this should have occurred earlier and the emphasis in fiscal policy on reducing debt rather than recovery from … to compute and easily automated. Whether based on an ad hoc debt-GDP limit or a DSGE model of an open economy, our …