Recent attempts to incorporate optimal fiscal policy into NewKeynesian models subject to nominal inertia, have tended to assume that policymakers are benevolent and have access to a commitment technology. A separateliterature, on the New Political Economy, has focused on real economies...

This paper analyzes German and Spanish fiscal policy using simple policy rules. We choose Germany and Spain, as both are Member States in the European Monetary Union (EMU) and underwent considerable increases in public debt in the early 1990s. We focus on the question, how fiscal policy behaves...

While consumption habits have been utilised as a means of generating a hump shapedoutput response to monetary policy shocks in sticky-price New Keynesian economies,there is relatively little analysis of the impact of habits (particularly, external habits) onoptimal policy. In this paper we...

In practice, central banks have been confronted with a trade-off between stabilising inflation and output when dealing with rising oil prices. This contrasts with the result in the standard New Keynesian model that ensuring complete price stability is the optimal thing to do, even when an oil...

Die öffentliche Debatte zur Generationengerechtigkeitist geprägt durch die These eines Kriegesder Generationen nach dem Motto: „Ältere plündernJunge aus“, untermauert mit der Aussage,dass die Staatsverschuldung die zukünftige Generationunzumutbar belastet.Will man sich diesem Thema...

This paper explores the relationship between the denomination ofpublic debt and the choice of exchange rate regime. Unlike indexeddomestic debt, foreign debt is subject to valuation e¤ects from realexchange rate shocks. In a standard set-up, where a peg functions onlyas a nominal anchor, more...

We describe a model for the optimization of the issuances of Public Debt securities developed together with the Italian Ministry of Economy and Finance. The goal is to find the composition of the portfolio issued every month which minimizes a specific "cost function". Mathematically speaking,...

Seitdem es Steuern gibt, wurden wieder und wieder Reformvorschläge vorgelegt, die das Steuersystemeinfacher und gerechter gestalten sollten. Was dem Steuerzahler aber unter diesem Leitbildschmackhaft gemacht wurde, führte im Ergebnis häufig zum schlichten Gegenteil der Intention: Dasdeutsche...

Since the start of the financial crisis, industrial country public debt levels have increased dramatically. And they are set to continue rising for the foreseeable future. A number of countries face the prospect of large and rising future costs related to the ageing of their populations. In this...