The macroeconomic and cross-generational effects of policies aiming at public debt reduction are shown to depend crucially on how wages respond to the associated tightening of fiscal policy. In order to dampen the adverse transitional effects on the macroeconomy and in order to protect currently...

This paper analyses the effects of cuts in the marginal tax rates on income from labour and capital on the macroeconomy and on the intergenerational distribution of welfare in a small open economy. For this purpose we et up a computable general equilibrium model incorporating overlapping...

This paper studies some macroeconomic effects in a small open economy of the fiscal policy rules implied by the Maastricht convergence criteria. The focus is upon the adjustment process in the run-up to EMU. Two country-specific shocks leading to higher public debts are considered: a fall in the...

Flexibility in fiscal policy is a necessary ingredient in a policy package for EMU. Even with strong endogenous shock absorbers, such as real wage flexibility, fiscal policy can speed up the stabilisation process in response to demand shocks. If real wages are rigid, as they typically are in...

This paper examines the distributional consequences of public debt reduction achieved through spending cuts. Under the assumption that public goods and transfers are relatively more valuable to the poor, our calculations indicate that the elderly poor stand to lose from such policies. Debt...

This paper assesses the generational stance of fiscal policy in Denmark. The results suggest that if current fiscal policy remains unchanged, the growth-adjusted lifetime net tax payments of future generations would be about 50 per cent higher than those paid by current newborns. It is found...

This paper examines the distributional consequences of public debt reduction achieved through spending cuts. Under the assumption that public goods and transfers are relatively more valuable to the poor, our calculations indicate that the elderly poor stand to lose from such policies. Debt...

This paper studies some macroeconomic policy interactions that may arise in a monetary union where monetary policy - in the hands of a common central bank - is designed so as to stabilize the aggregate price level, while fiscal policy - also operated by a supra-national authority in the form of...

Using the device of generational accounting, this paper assesses the distribution of lifetime net tax payments acros gender and generations in Denmark. We find two significant imbalences associated with current fiscal policy. First, not only do men contribute a much larger share of their...

We explore endogenous monetary unification in the context of a model in which a country with serious structural distortions (and, hence, high inflation) is admitted into a monetary union once its economic structure has converged sufficiently towards that of the existing participants. If...