We use responses to survey questions in the 2010 Italian Survey of Household Income and Wealth that ask consumers how much of an unexpected transitory income change they would consume. We find that the marginal propensity to consume (MPC) is 48 percent on average, and that there is substantial...

There is a well-known set of empirical regularities that describe the experience of countries that peg their exchange rate as part of a macroeconomic adjustment programme. Following-the-peg economies tend to experience an increase in GDP, a large expansion of production in the non-tradable...

This paper analyses the determinants of public expenditures allocated to investment. We perform welfare analysis in an overlapping generations model with public consumption, public investment, debt and taxes. The optimal public investment share depends positively on the productive contribution...

This paper describes the empirical regularities relating fiscal policy variables, the level of development and the rate of growth. We employ historical data, recent cross-section data, and newly constructed public investment series. Our main findings are: first, there is a strong association...