The concept of aggregate euro area fiscal stance and the underlying assumption of significantly positive cross-country fiscal spillovers is a highly debated topic. The European Commission seems intent on using this concept as a basis for introducing top-down coordination of European fiscal...

The German federal government's fiscal consolidation package, announced in June, is designed to permanently reduce the federal deficit to a new target level. This article uses a three-region version of the European Commission's QUEST model to gauge the impact of the package on Germany and the...