This paper investigates the role of fiscal policies over the aggregate EMU business cycle. Previous studies, based on the assumption of non-separability between public and private consumption, obtain a large public consumption multiplier, a small fraction of non-Ricardian households and,...

The euro has had a difficult second decade but the project has still had some important successes. The common currency is popular among the euro area's citizens, intra-European exchange rate instability has been removed and the ECB has successfully achieved its primary goal of price stability....