The fiscal commons problem is one of the most prominent explanations of excessive spending and indebtedness in political economics. The more fragmented a government, the higher its spending, deficits and debt. In this paper we investigate to what extent this problem can be mitigated by different...

In this paper we test whether German public debt has been sustainable by resorting to a test proposed by Bohn (1998). We apply non-parametric and semi-parametric regressions with time depending coefficients. This test shows that the mean of the coefficient relevant for sustainability has been...

This paper analyses the sustainability of Portuguese public finances, making use of a long dataset with more than a full century of observations. The use of such a long dataset is appropriate because both unit root and cointegration tests require a long period of data. The sustainability testing...

This paper empirically studies the effects of fiscal policy shocks on private consumption. Further, it tries to determine if the level of government bond yield and the unemployment rate affect that relationship. We use yearly data between 1970 and 2000 for thirty-eight countries, of which half...

This paper builds on the discussion paper published by HM Treasury in 2003 alongside the UK Government's assessment of the case for EMU entry. The paper considers the potential for fiscal policy to play a greater role in stabilisation policy if the UK were inside EMU. The paper considers: the...