The study sheds light on the stabilizing role of government budget. It finds that in Bulgaria both taxes and government spending are negatively related to the real growth rate. This leads to the conclusion that budgetary expenditure influence output in a non-Keynesian fashion. The size of...

During the Great Recession following the recent financial crisis large fiscal stimuli were implemented to counteract labor market sclerosis. We explore the effectiveness of various fiscal packages in a matching model featuring inefficient unemployment and a rich fiscal sector employing...