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A scientific note on the Italian Mini BOTs and the proposal of the CCCFs
Saccal, Alessandro - 2024
This note shows that the Italian Mini BOTs proposed in 2019 bore the potential neither to become Italian legal tender nor to practically increase Italian government debt, but to practically cause a mere reduction in taxation and thence in government spending or transfers. Since the Eurozone...
Persistent link: https://www.econbiz.de/10015076228
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Is a very high public debt a problem?
Leão, Pedro - 2015
This paper has two main objectives. The first is to propose a policy architecture that can prevent a very high public debt from resulting in a high tax burden, a government default, or inflation. The second objective is to show that government deficits do not face a financing problem. After...
Persistent link: https://www.econbiz.de/10011309513
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Dormant Shocks and Fiscal Virtue
Bianchi, Francesco - 2013
We develop a theoretical framework to account for the observed instability of the link between inflation and fiscal imbalances across time and countries. Current policy makers behavior influences agents ' beliefs about the way debt will be stabilized. The standard policy mix consists of a...
Persistent link: https://www.econbiz.de/10013080961
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Fiscal targeting rules and macroeconomic stability under distortionary taxation
Reicher, Claire A. - 2014 - This version: September 30, 2014
While European countries have engaged in a debate about fiscal policy rules, little is known about the ability of these rules to ensure stable debt and output paths when taxes are distortionary, particularly in a small open economy. In this situation, it turns out that the interaction between a...
Persistent link: https://www.econbiz.de/10010427960
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Uncertain fiscal consolidations
Bi, Huixin; Leeper, Eric M.; Leith, Campbell B. - 2013
The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition - either tax- or spending-based - are uncertain. We find that the composition of the fiscal consolidation, its duration, the monetary policy stance, the level of government debt, and...
Persistent link: https://www.econbiz.de/10009781108
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The dynamics of balanced expansion in monetary economies with sovereign debt
Böhm, Volker - 2018 - Version: September 26, 2018
The paper examines the role of fiscal and monetary policy on the dynamics of monetary expansion in a macroeconomy. Its microeconomic structure defined by producers with neoclassical production functions, heterogeneous OLG consumers, and a stationary fiscal and monetary policy induces a...
Persistent link: https://www.econbiz.de/10011903801
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Fiscal reform to benefit state and local governments : the modern money theory approach
Wray, L. Randall - 2019
This paper will present the Modern Money Theory approach to government finance. In short, a national government that chooses its own money of account, imposes a tax in that money of account, and issues currency in that money of account cannot face a financial constraint. It can make all payments...
Persistent link: https://www.econbiz.de/10012102465
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What modern monetary theory is, and what it is not
Carnevali, Emilio; Fontana, Giuseppe - In: European journal of economics and economic policies : … 20 (2023) 1, pp. 56-66
Modern monetary theory (MMT) has grown in popularity in recent years. Several central bankers have made passing comments about it. However, the publication of two papers by Drumetz/Pfister of the Banque de France in 2021 represents the first attempt at a more systematic assessment of MMT by two...
Persistent link: https://www.econbiz.de/10014433715
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Debt and the effects of fiscal policy
Favero, Carlo A. (contributor);  … - 2007
A fiscal shock due to a shift in taxes or in government spending will, at some point in time, constrain the future path … the effects of fiscal shocks, keeping track of the debt dynamics that arise following a fiscal shock and allowing for the …
Persistent link: https://www.econbiz.de/10003715720
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Cost of Borrowing Shocks and Fiscal Adjustment
de Groot, Oliver - 2013
shock. We also find that the bulk of fiscal adjustment takes place via a rise in government revenue rather than a cut in …-to-GDP ratio from rising as a consequence of the shock. Sub-dividing our sample, we also find that for countries participating in … Economic and Monetary Union (EMU) the primary balance response to a cost of borrowing shock was stronger in the period after …
Persistent link: https://www.econbiz.de/10013089247