Standard models of soft budget constraints consider bailouts as pure monetary transfers. However, in practice often additional obligations or restrictions, such as savings goals, are linked to monetary bailouts. This paper analyzes in a model of a federation if such restrictions change economic...

In 2009, Germany introduced a new debt rule in its federal constitution (Grundgesetz). The socalled ‘debt brake’ prescribes a balanced budget for both the federal level and the states. However, the states have leeway regarding transposition and specification of the national requirements into...

Fiscal federalism in Germany is characterized by lacking sub-national tax autonomy and intensive fiscal equalization. Due to a sunset clause, the current equalization system has to be renegotiated by the year 2019. Against this backdrop, this contribution studies the reform preferences of...

A new state debt cycle occurred mainly through external and contracted credit operations with federal banks from 2008, after a long period with few loans and debt stock fall. It is argued that exogenous macroeconomic factors were essential in the downward trend of the debt in the early 2000s,...

Federal states in Germany are characterized by low fiscal autonomy. Equalization systems in place balance revenue differences to a considerable extent and states cannot independently set taxes of any major relevance. Although these features of German federalism are notorious for their...

This Feature considers the debts of quasi-sovereign states in light of proposals to let them file for bankruptcy protection. States that have ceded some but not all sovereign prerogatives to a central government face distinct challenges as debtors. It is unhelpful to analyze these challenges...

In 2009, Germany introduced a new debt rule in its federal constitution (Grundgesetz). The socalled ‘debt brake' prescribes a balanced budget for both the federal level and the states. However, the states have leeway regarding transposition and specification of the national requirements into...

Fiscal federalism in Germany is characterized by lacking sub-national tax autonomy and intensive fiscal equalization. Due to a sunset clause, the current equalization system has to be renegotiated by the year 2019. Against this backdrop, this contribution studies the reform preferences of...

In November 2008, China announced a RMB4trn package of economic stimulus measures that also dealt with how it would be funded. As a result, in March 2009, the National People's Congress (China's parliament), with the approval of the central government, authorized the Ministry of Finance to issue...