Two labor market targeted …scal policies, a hiring subsidy and a wage subsidy for new hires of labor, are evaluated, and their macroeconomic e¤ects compared with those of standard …scal instruments. The analyses are based on an extension of a monetary, open economy, search and...

Sovereign and private sector default probabilities are introduced in a monetary model to evaluate whether the consideration of a sovereign risk channel can affect the size and sign of fiÂ…scal multipliers, an hypothesis recently appeared in the literature. The model is estimated using data of...