We estimate the political economy determinants of budget deficit forecast errors. Since the adoption of the Stability Pact, Eurozone governments have manipulated forecasts before elections. The political orientation and the institutional design of governments also affects the quality of forecasts.

The traditional approach to measuring allocative efficiency is based on input prices, which are rarely known at the firm level. This paper proposes a new approach to measure allocative efficiency which is based on the output-oriented distance to the frontier in a profit?technical efficiency...

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper we examine whether there are overlapping trends of regional development in the EU: overall convergence on the one hand and persistent or even increasing...

The analysis of regional income and productivity differences in the European Union (EU) has some tradition. The theoretical framework of most empirical studies on these subjects is the neoclassical growth model. Thus, research has focussed on convergence of income and productivity among EU...

In this paper, we investigate the link between optimal level of leverage and macroeconomic uncertainty. Using the model of firm's value maximization, we show that as macroeconomic uncertainty increases, captured by an increase in the variability of industrial production or inflation, firms...

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. One of the “stylised facts” from the empirical literature is that the process of absolute convergence observed for decades has slowed down or even petered out during...

Spending on productive infrastructure is seen as an important contributor to long term economic growth. Several authors have documented a downward trend in public investment during the last three decades and warned about its possible detrimental effects on the economy. A not well-realized fact...