This paper presents a structural model of optimal fiscal policy in a multiparty system which allows the existence of coalition governments. The paper shows how political effects weaken stabilizing feedback rules from inherited public debt to the current poicy instruments of government...

This paper tests Barro's (1979) tax smoothing model of fiscal policy. The model implies that budget deficits and surpluses are used optimally to minimise the distortionary effects of taxation, given a certain path of spending. The theory has a number of implications both for the statistical time...

The primary objective of this paper is to analyse the role of evasion possibilities as a determinant of the general structure of commodity and income taxes and of public goods supply. A secondary objective is to provide a defence of differentiated commodity taxes based on the screening role of...

This paper questions the widespead practice of assessing the hypothesis of long-run fiscal policy sustainability by means of conventional unit-root tests that do not allow for the possible impact of regime shifts. Using the Greek economy as a model case, the Zivot- Andrews squential...

The Fiscal Stability Pact for EMU suggests that constraints on fiscal policy are thought by policy makers to be necessary to ensure that the independent European central bank can control inflation. In this paper we examine the interrelationship between monetary and fiscal policy when both follow...