Over the last few decades, real interest rates have trended downward in many countries. The most common explanation is that this reflects depressed demand due to demographic, technological and other real factors such as income inequality. In this paper we explore the claim that these trends may...

Based on a panel data model this paper investigates whether the effects of fiscal policy on national saving in Europe have changed after the Maastricht Treaty came into force. Recently Giavazzi, Jappelli and Pagano (2000) found evidence that national saving responds nonlinearly to fiscal policy...

With gross government debt of 219% of GDP in 2016, Japan’s fiscal situation is in uncharted territory and puts the economy at risk. In addition to raising productivity and growth, Japan needs a more detailed and credible fiscal consolidation path, including specific revenue increases and...

I study optimal capital and labor income taxation in a business cycle model with the recursive preferences of Epstein and Zin (1989) and Weil (1990). In contrast to the case of time-additive expected utility, I find that it is no longer optimal to make the welfare cost of distortionary taxes...

Debt-to-GDP ratios have grown to unprecedented levels in many industrialized economies. This requires disciplined consolidation efforts which are, however, supposed to come now at the wrong time with the economic recovery being fragile. Against this background, we call for a global debt brake...

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 private sector through a higher risk premium on...

This paper summarizes unprecedented adverse health and economic impacts as well as policy responses in the Asia and Pacific region and the rest of the world generated by the coronavirus disease (COVID-19) pandemic in 2020. By the end of 2020, over 80 million people had been infected, with...

This paper presents a framework for analysing the evolution of the structural government deficit estimated using the official EU methodology relevant for the Stability and Growth Pact. The focus of our framework lies in the analysis of the main driving forces of changes in estimated structural...

The policy focus on excessive leverage in the euro area has raised interest in developing comprehensive analytical approaches to better understand the interrelationship between leverage and deleveraging processes across economic agents. In particular, the interplay between government debt and...