We consider the real-time implementation of a fiscal policy rule based on tax smoothing (Barro (1979), Bohn (1998)). We show that the tax smoothing approach, augmented by fiscal habit considerations, provides a surprisingly accurate description of US budget surplus movements. In order to...

This paper analyses the effect of the fiscal structure upon the trade-off between inflation and output stabilization in presence of technological shocks in a DGE model with nominal inertia. The model is calibrated to reproduce the main features of European economies and it integrates a rich menu...