As part of Germany’s fiscal response to the Covid-19 pandemic, parents received three payments totalling e450 per child. Randomization in the payment dates and daily scanner data allow us to identify the effects of these transfers on household spending. We find a significant but small spending...

The sharp rise in debt experienced by most OECD countries raises questions about the prudent debt level countries should target. It also raises questions about the fiscal frameworks needed to reach them and to accommodate cyclical fluctuations along the path towards a prudent debt target. The...

This paper develops a medium-scale dynamic, stochastic, general equilibrium (DSGE) model for fiscal policy simulations. Relative to existing models of this type, our model incorporates a two-country monetary union structure, which makes it well suited to simulate fiscal measures by relatively...

The recent euro area sovereign debt crisis has shown the importance of market reactions for the sustainability of debt. The objective of this paper is to calculate endogenous government debt limits given the markets assessment of the probability to default. The estimated primary balance reaction...