There is growing evidence that fiscal consolidation may contribute to economic growth even in the short term. In this paper we review recent research on such non-Keynesian fiscal policy effects and apply panel data econometric techniques to examine the consequences of fiscal consolidation in the...

Unsustainable levels of debt for some European economies is causing enormous strain in the Euro area. How to tide over the debt crisis seems to be the most important objective the European policy makers are currently facing. We use a dynamic general equilibrium closed economy model to compute...

Notwithstanding the repeated efforts of the European Authorities to harmonize and coordinate countries’ taxation, and in spite of the effects of international tax competition, in 2009 EA taxation was still far from being homogeneous among Member Countries. Given this situation, the purpose of...

This paper examined the nature of fiscal consolidation during the era of rule based fiscal control in states and its implications for federal transfers. The analysis revealed that improvement in fiscal balance has been associated with increasing disparities in developmental spending across...

The economic and financial crisis of 2007/2009 has posed unexpected challenges on both the global and the regional level. Besides the US, the EU has been the most severely hit by the current economic crisis. The financial and banking crisis on the one hand and the sovereign debt crisis on the...

This paper investigates the relevance of the No-Ponzi game condition for public debt (i.e. the public debt growth rate has to be lower than the real interest rate, a necessary assumption for Ricardian equivalence) and of the transversality condition for the GDP growth rate (i.e. the GDP growth...

While linkages between some macroeconomic phenomena (e.g. unemployment, GDP growth) and suicide rates in some countries have been explored, only one study, hitherto, has established a causal relationship between fiscal consolidation and suicide, albeit in a single country. This study examines...

European Union member countries are currently exposed to negative implications of the economic and debt crisis. Questions associated with disputable implications of fiscal incentives seem to be contrary to the crucial need of the effective fiscal consolidation that is necessary to reduce...

The recent sovereign debt crisis has renewed the interest in fiscal consolidation policies and the associated output losses they entail. However, countries that adopted such policies are also plagued by persistent unemployment, and debt reduction ought to magnify the problem. This paper extends...

Public debt in the OECD area passed annual GDP in 2011 and is still rising. For many countries, just stabilising debt - let alone bringing it down to a more sustainable level - is a major challenge. The debt overhangs can affect growth through channels such as raising the cost of capital. The...