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...

This paper develops a comprehensive endogenous growth framework to determinethe optimal mix of growth policies. The analysis is novel in that we captureimportant elements of the tax-transfer system and fully take into account transitionaldynamics in our numerical analysis. Currently, for...

Previous research on optimal R&D subsidies has focussed on the long run.This paper characterizes the optimal time path of R&D subsidization in a semi-endogenous growth model, by exploiting a recently developed numerical method.Starting from the steady state under current R&D subsidization in 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...

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...