Fiscal rules are instrumental for restraining deficit and spending biases in euro area Member States that could …

disagrees on even the qualitative response of key macroeconomic variables to government spending and tax shocks. We provide new … regards government spending shocks. In response to such shocks real GDP, real private consumption and the real wage all … diverging results as regards the effects of tax shocks, with the estimated effects ranging from non-distortionary to strongly …

caused by euro area tax structures. Our analysis shows that lowering tax distortions to levels prevailing in the United … States would result in an increase in hours worked and output by more than 10 percent. At the same time, tax reductions would … have positive spillovers to the euro area’s trade partners, bolstering the case for tax reforms from a global perspective …

implications of fiscal policy, which is specified by either a debt-based tax rule or a balanced-budget rule allowing for temporary …

This paper develops a model with multiple steady states (low tax and unemployment rate versus high tax and unemployment … decrease it can only do so gradually because of matching frictions which in turn implies that the tax burden remains high and … transition to the low-unemployment regime is not possible when tax rates are adjusted each period to balance the budget even …

Using vector autoregressions on U.S. time series for 1957-1979 and 1983-2004, we find government spending shocks to …