This paper analyzes the relationship between fiscal adjustment and real GDP growth in a panel of 26 transition economies during 1992-2001. Unlike most previous studies using cross-country regressions, the paper finds a positive and statistically significant relationship between fiscal adjustment...

En este trabajo se analizan los efectos sobre la actividad económica derivados de mantener un nivel elevado de deuda pública por medio de simulaciones realizadas con modelos de equilibrio general dinámico estocástico (DSGE, por sus siglas en inglés). La fuerte acumulación de deuda pública...

Economics literature suggests that, even in the absence of fiscal costs, a persistently high and increasing public debt ratio may have a detrimental effect on long run economic growth in an economy that is not over-accumulating capital like Finland today. High public debt creates expectations...

Wagner's Law is the first model of public spending in the history of public finance. The aim of this study is to assess its empirical evidence in Italy for the period 1960–2008 at a disaggregated level, using a time series approach. After a brief introduction, a survey of the economic...

This paper investigates the impact of inequality in the geographic distribution of fiscal resources on regional economic growth under fiscal decentralization policy in the context of China’s experience, using panel data for 28 provinces over the period 1987–2010. In the recent past, the...

Public investment is key to growth in developing oil-exporting countries and oil revenue is an important source of finance for public investment. Assessing the growth impact of public investment in Iran under various investment scaling-up (gradual, aggressive, and conservative) and oil price...

In this paper, we compare growth and welfare effects of various budget rules within an endogenous growth model with productive public capital, utility enhancing public consumption and public debt. We find that introducing a fixed deficit regime does not affect the long run growth rate compared...

The financial crisis and the ensuing Great Recession created unprecedented federal budget deficits in recent years. In fact, these events, combined with subsequent slow growth and two continuing unfunded wars, have resulted in a national debt that is out of control by all meaningful measures....

We study how macroeconomic shocks affect U.S. public debt dynamics using a VAR with debt feedback. Following a fiscal austerity shock, the debt ratio initially declines and then returns to its pre-shock path. Yet, the effect is not statistically significant. In a weak economic environment, the...

Is the failure of natural resource abundance to achieve better economic outcomes due to limited financial development or fiscal policy short-termism? I answer this question in a precautionary savings model where both resource revenues and asset returns are uncertain. Calibrating for Colombia, I...