This paper analyzes the distribution of discretionary transfers from higher tiers of government in the process of fiscal adjustment in local jurisdictions which were hit by a negative revenue shock in formula transfers. Spanish local governments experienced a 30% fall in their revenue-sharing...

What would happen if the City of Chicago, the Chicago Public Schools, and Cook County all became insolvent at the same time? How should policy-makers and courts respond? This Article argues that the pension and budget crises that have left so many local governments deeply in debt have generated...

This paper studies the effectiveness of Euro Area (EA) fiscal policy, during the recent financial crisis, using an estimated New Keynesian model with a bank. A key dimension of policy in the crisis was massive government support for banks - that dimension has so far received little attention in...

Monetary policy leaves a fiscal footprint. In some circumstances, relieving the fiscal burden becomes the main goal of policy, and inflation control is subordinate. This article notes that the same is true of macroprudential policy, and it characterizes the size and sign of its fiscal footprint,...

This paper aims to shed light on the medium term effects of banking crises on productivity growth, bringing the 'creative destruction' hypothesis to the data. The analysis is done at both the macro and micro levels. At the macro level, I study the differences in mean productivity growth before...

This paper studies the effectiveness of Euro Area (EA) fiscal policy, during the recent financial crisis, using an estimated New Keynesian model with a bank. A key dimension of policy in the crisis was massive government support for banks—that dimension has so far received little attention in...

This paper reviews the performance of the euro area since the euro's launch 20 years ago. It argues that the euro crisis has exposed existential flaws in the euro regime. Intra-area divergences and the corresponding buildup of imbalances had remained unchecked prior to the crisis. As those...

We analyse the poisonous interaction between bank rescues, financial fragility and sovereign debt discounts. In our model balance sheet constrained financial intermediaries finance both capital expenditure of intermediate goods producers and government deficits. The financial intermediaries face...

Government financial assets are increasingly recognized as playing an important role inassessing fiscal sustainability. However, very little research has been done on the dynamics ofgovernment financial assets compared to liabilities. In this paper, we investigate the impact ofrecent financial...

We analyze the poisonous interaction between bank rescues, financial fragility and sovereign debt discounts. In our model balance sheet constrained financial intermediaries finance both capital expenditure of intermediate goods producers and government deficits. The financial intermediaries face...