When enough agents do not participate in asset markets, the slope of the aggregate demand curve is reversed. Monetary policy should be passive, to ensure equilibrium determinacy and to minimize variations in output and inflation. This paper presents evidence that asset markets participation in...

The study looks at primary expenditure developments in the euro area, its three largest members and four “macro-imbalances” countries for the period 1999-2009. It compares actual expenditure trends with those that would have prevailed if countries had followed neutral policies based on...

This paper explores how discretionary fiscal policies on the revenue side of the government budget have reacted to economic fluctuations in European Union countries. For this purpose, it uses data on legislated revenue changes and structural indicators provided twice per year by National Central...

This paper investigates how expectations about future government spending affect the transmission of fiscal policy shocks. We study the effects of two different types of government spending shocks in the United States: (i) spending shocks that are accompanied by an expected reversal of public...

The volatility of general government tax revenues has increased in Poland in recent years. The correlation between GDP growth and revenue growth appears to be lower in Poland than in many other EU Member States, which suggests that the instability of its revenues has a different. This Country...

The economic gap between the EU and three candidate countries - Bulgaria, Romania and Turkey - is significant. Living standards, as measured by GDP per capita at PPP, are less than one third of the level prevailing in the former EU-15 u0096 and about half of the average level in the new member...