The fiscal theory of the price level says that the price level can be made determinate if the government uses fiscal policies such that government liabilities explode unless the price in the first period is at the "right" level. The policy implications are disturbing, as they call for rather...

This paper explores the role of corruption in a two-country model with fiscal spillovers. In the absence of cooperation on governance issues, countries always have a strategic incentive to appoint policymakers whose aversion to corruption is lower than average. An international agreement is a...

In this paper, we introduce input-specific externalities in a dynamic general equilibrium model with heterogeneous households and a finance constraint (Woodford (1986)). In contrast to existing papers, average labor and capital have not a positive impact on the total productivity of factors, but...

This paper examines the influence of political ideology on economic growth in the French democracy since 1871. It does so by addressing three main issues : the property and the reliability of a political ideology index in the long-run, the robustness of the relationship between ideology and...

We analyze how investment subsidies can affect aggregate volatility and growth in economies subject to capital market imperfections. Within a model featuring both frictions on the credit market and unequal access to investment opportunities among individuals, we provide specific fiscal...

This paper offers a framework to study commitment and cooperation issues in games with multiple policymakers. To reconcile some puzzles in the recent literature on the nature of policy interactions among nations, we prove that games characterized by different commitment and cooperation schemes...

We assess fiscal performances in G7 and selected Latin American and Asian countries. We analyze two questions: (i) have public finances been sustainable? (ii) do countries follow more restrictive fiscal policies when debt starts to rise? We find that: (i) The traditional unit root tests often...

The paper presents both the New Consensus and Keynesian equilibrium within the usual fourcompetitive macro-markets structure. It gives theoretical explanations of the perniciouseffects that the NCM governance, which has been designed for ergodic stationary regimes,brings about in Keynesian...

This paper explores the consequences of introducing a monopolistic competition in an intertemporal two-sector small open economy model which produces traded and non traded goods. It is assumed that the non traded sector is the locus of the imperfectly competition. Our analysis shows that markup...

The paper studies the effects of heterogeneity upon the monetary and fiscal-budgetary policy interactions in a Keynesian monetary union. As a result of interactions, some of our results contrast sharply with the ones in studies that consider separately monetary, fiscal and budgetary policies....