Recent evidence has renewed views on the size of fiscal multipliers. It is notably emphasized that fiscal multipliers are higher in times of crisis. Starting from this literature, we develop a simple and tractable model to deal with the fiscal strategy led by euro area countries. Constrained by...

The paper investigates how European fiscal authorities behaved in the last decades. We argue that the cyclically-adjusted public budget (CAPB) is a too rough indicator of the fiscal stance as a function of the two objectives of output stabilization and debt decumulation. We construct two...