This paper proposes a dynamic politico-economic theory of fiscal policy in a world comprising a set of small open economies, whose driving force is the intergenerational conflict over debt, taxes, and public goods. Subsequent generations of voters choose fiscal policy through repeated elections....

This paper proposes a dynamic politico-economic theory of debt, government finance and expenditure. Agents have preferences over a private and government-provided public good, financed through labour taxation. Subsequent generations of voters choose taxation, government expenditure and debt...

This paper proposes a dynamic politico-economic theory of debt, government finance and expenditure. Agents have preferences over a private and a government-provided public good, financed through labor taxation. Subsequent generations of voters choose taxation, government expenditure and debt...

Das günstige Steueraufkommen am aktuellen Rand hat den Arbeitskreis »Steuerschätzungen« bei seiner 141. Sitzung Ende Oktober 2012 dazu veranlasst, die Schätzung für das Jahr 2012 nach oben zu korrigieren. Für das laufende Jahr wird nunmehr mit einem Steueraufkommen in Höhe von 602,4 Mrd....

We present a model in which a conservative incumbent with preferences for low public spending can strategically run a budget deficit to prevent the left-wing opposition candidate from choosing high public spending if elected, and possibly also to ensure his own reelection. We find that the...

This paper argues in favor of empirical models built by including in fiscal VAR models structural shocks identified via the narrative method. We first show that "narrative" shocks are orthogonal to the relevant information set a fiscal VAR. We then derive impulse responses to these shocks. The...

A key issue in current research and policy is the size of fiscal multipliers when the economy is in recession. We provide three insights. First, using regime-switching models, we find large differences in the size of spending multipliers in recessions and expansions with fiscal policy being...

This discussion paper resulted in a publication in <A HREF="http://link.springer.com/article/10.1007%2Fs10645-012-9188-7">'De Economist'</A>, 2012, 160(3), 219-236.</A> When debt levels approach critical levels, tax payers may revolt against the associated debtservice burden. Funding problems may arise in capital markets when lenders anticipate such revolts and refuse to...</a>

The aim of this paper is to illustrate the methodological approach used by the Commission services (DG ECFIN/C2) to carry out, in a systematic and harmonised way, public debt sustainability analysis (DSA) for EU Member States. Analysing recent and prospective public debt developments and risks...

We assess the sustainability of public finances in OECD countries using panel unit root and cointegration analyses. Results show: no cointegration (no sustainability) between revenues and expenditures; improvement of the primary balances after worsening debt ratios; causality from government...