In this study, we will perform a simulation exercise to investigate whether the use of explicit fiscal rules improves the macroeconomic performance in the economic framework of the European Union (EU), where the fall in income levels occurred very asymmetrically, and this has accentuated the...

The Great Recession (2009/10) resulted in the need of different economic policies and structural reforms to boost economic growth both in the advanced and in the emerging economies. In this paper, we start from a theoretical concept that is relatively new - the modified output gap (MOG), based...