This paper provides the explicit expression of investment facing a binding debt ceiling and the explicit expression of … of the parameterizations of these Lagrange multipliers used in Euler investment equations tests during the 1990's. …

investment expenditure is crowded-out by public spending in the short-run. In this contribution, we address this empirical fact … accommodating the observed negative relationship between investment and government expenditure. Our numerical experiments point out … fiscal expansion crowds-out real consumption by a smaller amount and investment by a larger one, while the current account …