A common trends model for grow national income, private consumption, government consumption and net taxes isestimated on U.S. data. The system has two cointegrating vectors and thus two common stochastic trends, interpreted as a technology trend and a public sector trend. The two temporary...

This paper contains an empirical investigation of the effects of fiscal policy on interest rates based on a conventional stochastic macro model designed for a small open economy. The empirical investigation undertaken utilizes data for Sweden, a country which has experienced very large...

There are competing “views” on the economic effects of debt finance. One view argues that tax and debt finance have identical effects on various economic measures, a view sometimes termed “Ricardian Equivalence”. However, this “Ricardian view” remains controversial, with other views...