The potential interactions among fiscal policies, investments and economic growth are complex and manifold. In this paper, we will perform a systematic comparative analysis of the various economic insights that are currently available on these complex relationships, both theoretically (by a...

The issue of whether the public sector enhances or retards long-run economic growth has been debated passionately in recent years. In this paper we use meta-analysis to shed light on the issue. A sample of 93 published studies, yielding 123 meta-observations, is used to examine the robustness of...

This four-chapter overview of basic exchange rate theories discusses (i) the elasticity and absorption approach, (ii) the (long-run) implications of the monetary approach, (iii) the short-run effects of monetary and fiscal policy under various economic conditions, and (iv) the transition from...

This paper examines the pricing of public debt in a quantitative macroeconomic model with government default risk. Default may occur due to a fiscal policy that does not preclude a Ponzi game. When a build-up of public debt makes this outcome inevitable, households stop lending such that the...

This paper studies the role of the markup of price over marginal cost for the transmission of fiscal policy shocks. We construct time series of markups allowing for fluctuations in capacity utilization and total factor productivity and use an aggregate production function that is more general...

This paper quantifies the macroeconomic and welfare implications of (i) changes in the tax-spending mix and (ii) debt consolidation policies. The setup is a neoclassical growth model augmented with a relatively rich public sector. The model is calibrated to the Greek economy. The results suggest...

We assess the response of fiscal policy to developments in asset markets in the US. We estimate fiscal policy rules augmented with aggregate wealth, wealth composition (i.e. financial and housing wealth) and asset prices (i.e. stock and housing prices) using two nonlinear specifications that...

Weighing the current world affairs, there seems to be strong association between natural resources, corruption, and bad economic performance. We empirically investigate the interplay between different institutional qualities and fiscal policy, and their effect on resource-abundant economies’...

We examine the interactions between public and private sector wages per employee in OECD countries. The growth of public sector wages and of public sector employment positively affects the growth of private sector wages. Moreover, total factor productivity, the unemployment rate and the degree...

The empirical evidence testing the validity of the Rational Partisan Theory (RPT) has been mixed. In this article, we argue that the inclusion of other macroeconomic policies and the presence of an independent central bank can partly contribute to explain this inconclusiveness. This article...