The study will first outline the way in which Germany's fiscal policy was driven for several decades by a paradigm that centered on deficit control and reduced state involvement in the economy. It will assess the damage wrought by this strategy; for example, underinvestment in infrastructure and...

The sustainability of public finances should be measured by the debt-to-GDP ratio; the debt-to-GDP ratio is best controlled by keeping the deficit in check. For decades, these ideas shaped German fiscal policy. In 2009, with the introduction of the debt brake, this approach found its way into...

In this chapter, we describe the essence and role of the institutions in the modern economic systems, the main issues concerning the institutional convergence in relation to the EU integration, the institutional capital and the impact of the quality and effectiveness of the institutions on...

This volume comprises several studies and papers published in the last decades. They have been selected and ranged so that to provide a minimum of coherence concerning the phases which Romania has crossed in her way to the advanced socio-economic system of European type: transition to the market...

How is the size of the informal sector affected when the distribution of social expenditures across formal and informal workers changes? Given this distribution, how is it affected when the generosity of these transfers changes? We use a search frictions model with informality, (ex post)...

We study how firms' expectations and actions are affected by both aggregate and industryspecific conditions using a survey of French manufacturing firms. We document an important new stylized fact. In response to industry-level shocks that have no aggregate effects, firms' aggregate expectations...

This paper provides evidence on migration of workers within the European Union 15 (EU15), disaggregated by occupation. Using the European Labor Force Survey from 1983-2013, we find that in high-educated occupations, EU15 workers move to EU15 countries where their occupation is relatively more...

One of the most serious problems that a central bank in an emerging market economy can face is the sudden reversal of capital inflows. Hoarding international reserves can be used to smooth the impact of such reversals, but these reserves are seldom sufficient and always expensive to hold. In...

We examine two approaches characterized by different tail features to extract market expectations on the Mexican peso-US dollar exchange rate. Expectations are gauged by risk-neutral densities. The methods used to estimate these densities are the Volatility Function Technique (VFT) and the...

This paper studies how inflation as a macroeconomic indicator affects nominal bond prices. I consider an economy with a representative agent with Epstein-Zin preferences. Regime switching affects the state-space capturing inêation and consumption growth. Thus, the agent is concerned about the...