This paper analyses the effects of discretionary fiscal policy by presenting new empiricalevidence for Germany within a structural vector autoregression (SVAR) framework. FollowingBlanchard and Perotti (2002), the SVAR model is identified by applying institutionalinformation. We find no...

This paper uses an overlapping generations model with international labor mobility and apolitically responsive fiscal policy to examine aging in developed and developing regions.Migrant workers change the political structure composed of young and elderly voters in bothlabor-receiving and...

The German Income Tax Reform 2000, which announced a reduction in income tax rates to beimplemented in a series of three stages, was welcomed by the public as a step towards unleashinglurking growth potentials. Nonetheless, in the course of the year 2001 a dispute arose, centeringaround the...

We use a stylized model to show that, if transfers to the poor arefounded on a security argument, there is a negative trade-off betweenlaw enforcement expenditures and criminality. In contrast, if transfersare based on altruism, the correlation between the same variables mayappear positive. We...

The output multiplier turns negative before a deficit spending program expires.We show the generality of this unpleasant finding for the standard real business cyclemodel. We then calibrate an extended model for the US and demonstrate how fiscalstimulus slows down economic recovery from...

By using official time series of the Italian evaded VAT base (Ministry of Finance) for the period 1980-2004 we investigate empirically the long-run characteristics of tax evasion and the relationship with the tax burden. We focus on three important issues not analyzed so far[...]

When a deficit occurs in the funding of collective goods, it is usually covered by raising theamount of taxes or by rationing the supply of the goods. This article compares the efficiencyof these institutions. We report the results of a 2x2 experiment based on a game in the firststage of which...

Endogenous growth models, such as Barro (1990), predict that governmentexpenditure and taxation will have both temporary and permanent effects on growth.We test this prediction using panels of annual and period-averaged data for OECDcountries during 1970-95, isolating long-run from short-run...

This paper examines whether the evidence from OECD countries is consistent withthe predictions of endogenous growth models that the structure of taxation and publicexpenditure can affect the steady-state growth rate. We find strong support for theBarro (1990) public policy endogenous growth...

This paper asks whether tax cycles can represent the optimal policy in a model without any extrinsic uncertainty. I show, in an economy without capital and where labor is the only choicevariable (a Lucas-Stokey economy), that a large class of preferences exists, where cycles are optimal, as well...