This doctoral thesis addresses in a sequence of five essays the question how fiscal policy and economic output are interrelated in emerging Europe and how this relationship is shaped by the respective politico-economic environment and the individual-level support for economic reforms. Following...

This paper presents an analysis of how alternative models of the business cycle can replicate the stylized fact that large governments are associated with less volatile economies. Our analysis shows that adding nominal rigidities and costs of capital adjustment to an otherwise standard RBC model...

Fluctuation Economic research grow up from 80’s with the Dynamic Stochastic General Equilibrium Models (DSGE), where the agent are search for the optimum point at the intertemporal decisions, that is decision over time of how consumers make choice between present and future consumption at the...

The role played by financial intermediaries and banks in modern economies is undeniably critical. However, explaining their importance in a theoretical general equilibrium framework presents some challenges. If firms and households have unrestricted access to complete financial markets, then at...

The idea of a flat tax, a tax levied at a single rate, has become an increasingly discussed and implemented fiscal strategy across Europe and the rest of the world. Estonia, Latvia, and Lithuania adopted flat tax systems in 1994 and 1995, making them the first modern countries to adopt flat...

Developing country fiscal policy outcomes documented in data point to stark differences compared with developed ones. Most prominent difference is the excessive volatility of government consumption and transfer payments and their positive correlation relative to output. This seemingly...

Since the abolition of its Apartheid regime in 1994, South Africa has launched a massive program of education, which has been financed through resources representing on average 21% of the national budget or 7% of GDP. Today, the GDP share of public spending on education is 1.3 times the average...

The subject of the relationship between state budget and trade balance is important as economic subject, not only at the level of developing countries, but also at of advanced ones, too. Such importance emerged clearly when 1980s witnessed in United States of America a deficit in both state...

This paper contributes to the literature on foreign aid by exclusively explaining a donor’s motivation for foreign external assistance. The underlying framework focuses on recipients’ needs for foreign aid to address income inequality as and when growth occurs. A tax-subsidy policy is...

The twenty-two papers collected in this volume illustrate the itinerary of Henry Tulkens, an applied theorist, on the occasion of his retirement from teaching. The collection is structured in four parts: I. Decentralized resource allocation processes for public and private goods - II....