Debt-financed fiscal stimulus programmes directly stimulate aggregate demand through government expenditure or tax cuts …, but their effectiveness is highly dependent on direct crowding out of private sector expenditure, spillover effects to the …) on short-term and long-term (nominal and real) interest rates. These disaggregated expenditure and revenue shocks raise …

revenues, which also improves fiscal sustainability. Specifically, rationalising public expenditures without jeopardising the …