Policymakers must do something to slow the growing debt burden or else face a major fiscal meltdown. Proposals such as Medicare for All and the Green New Deal would only make the looming fiscal crisis worse

To fulfill their tasks, governments rely on public expenditures and taxes. Both influence the incentives and shape the decisions and actions of private economic agents. As governments resort to both instruments simultaneously, their combined theoretical impact on economic performance is a priori...

This paper discusses the short- and medium-term fiscal implications of government wage bill spending. Working with a sample of 137 advanced, emerging and low-income countries, we use a panel VAR approach to identify differences in the dynamic behavior of revenues, non wage expenditures, and the...

We use a new approach to assess long-term fiscal developments. By analyzing the time varying behaviour of the two components of government spending and revenue responsiveness and persistence - we are able to infer about the sources of fiscal behaviour. Drawing on quarterly data we estimate...

The current European fiscal framework is highly complex. The multitude of fiscal rules and the discretion in their enforcement precludes an effective oversight and weakens the effectiveness of fiscal rules substantially. Against this background, we present a proposal for a careful refocusing of...

This policy note presents an assessment of the EU budgetary package for 2021-2027, including the European Union Recovery Instrument 'Next Generation EU' (EURI-NGEU), with an introduction to the EU decision-making process and the state of play of the relevant legislation as well as an annexed...

We apply non-linear error-correction models to the empirical testing of the sustainability of the government’s intertemporal budget constraint. Our empirical analysis, based on Italy, shows that the Italian government is meeting its intertemporal budget constraint, in spite of the high levels...

This note shows that the Italian Mini BOTs proposed in 2019 bore the potential neither to become Italian legal tender nor to practically increase Italian government debt, but to practically cause a mere reduction in taxation and thence in government spending or transfers. Since the Eurozone...

This article reviews a rapidly growing literature on how climatic risks and events affect public finances around the world. This literature includes empirical evaluations of how past climatic events have affected fiscal outcomes, empirical and model-based assessments of how climatic risks affect...