This paper shows that so-called modern monetary theory (MMT) lacks a sound economic foundation for its far-reaching policy recommendations. This paper's main contribution to the literature concerns the theoretical foundation of MMT. A simple macroeconomic model shows that MMT is...

The Great Recession has severely hit the economies of most of the countries. Given that, fiscal policies have gained back a central role in the debate as a tool to recover from this situation. This paper provides an overview about the main controversial issues related to the fiscal policy. In...

<Para ID="Par1">This paper summarizes current EU austerity programs and discusses various fiscal policy reform proposals under consideration. It points out political and theoretical problems with these proposals and makes the case for fiscal consolidation through spending reduction rather than tax cuts. The...</para>