Hercowitz, Z.; Strawczynski, M. - Foerder Institute for Economic Research, Eitan Berglas … - 2001
This paper analyzes the implications of a cost of deviating upwards from a public-debt/output guideline, as the 0.6 ratio in the Maastricht Treaty, in the context of a fiscal policymaking model. Given a pre-announced timetable for enforcement, the dynamic paths of the tax rate and government...