The 1998 Code for Fiscal Stability sets out the framework within which UK fiscal policy is now set. While having such a code does not make it easier for a Government to meet its fiscal objectives, it may improve the economic credibility of the policy process. To date the Code has generally...

Europe's banking system has been in a state of systemic fragility since 2007-08. The current phase is marked by a sequence of interactions between sovereign problems and banking problems, resulting in gradual contagion to more countriesand more asset classes. The banking and sovereign crises are...

Die Schuldenkrise der Euro-Länder hat schlaglichtartig die erheblichen finanzpolitischen Unterschiede zwischen den Mitgliedstaaten verdeutlicht. Viele der damit verbundenen Konflikte und Probleme wären möglicherweise zu entschärfen, wenn die EU mehr Kompetenzen im fiskalischen Bereich...

Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behavior. Milesi-Ferretti (2003) develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this creative accounting...

We consider a dynamic general equilibrium model with collective wage bargaining and investigate how unemployment dynamics are affected by two types of budgetary policies. In line with traditional reasoning, a balanced-budget rule amplifies fluctuations in the short run, whereas an...

Pre-Accession Transition Countries (PATCs) aim at early admittance to the monetary club. Their fiscal indicators – deficit and debt - do not show any serious symptoms. Closer scrutiny reveals, however, that the interest burden of their public debt might be underestimated, and that...