After entering the EU in 1986, Portugal benefited from low interest rates and some growth momentum. However, the difficulty in taming fiscal imbalances, the pro-cyclicality of fiscal policy, the use of extraordinary fiscal measures, coupled with the 2008-2009 economic and financial crisis led to...

We assess the sustainability of public finances in OECD countries, over the period 1970-2010, using unit root and cointegration analysis, both country and panel based, controlling for endogenous breaks. Results notably show: lack of cointegration – absence of sustainability – between...

We use a panel of developed and emerging countries for the period 1970-2008 to assess how fiscal policy volatility and financial crises affect growth. We find that economic growth is lower in the presence of more volatile fiscal policy. Moreover, with a financial crisis government spending is...