The Ricardian equivalence theorem has been widely debated since (at least) the seventies. The theorem states that househoolds should not change their consumption path in response to changed timing of taxes, given the path of government consumption. In the paper, theoretical models giving rise to...

This Occasional Paper provides an overview of the main challenges facing Hong Kong SAR as it continues to become more closely integrated with the mainland of China. Section I provides an overview of recent macroeconomic developments and the main policy issues in Hong Kong SAR. Section II...

This Selected Issues paper for Ireland highlights that fiscal consolidation resulted in a tremendous reduction in public debt from nearly 100 percent of GDP in 1991 to about 30 percent in 2004. This has reflected a combination of policy decisions and economic circumstances. Excluding 2001, when...

This 2004 Article IV Consultation highlights that economic growth in Cyprus has begun to rebound following a more modest performance in 2002–03, recovering in real terms to about 3½ percent in 2004, mainly driven by an increase in domestic demand. Real per capita income has continued...

This Selected Issues paper and Statistical Appendix for Netherlands Antilles examines the economic growth in Small Island Economies. The paper finds that the Small Island Economies as a group grew faster than the rest of the world during 1960–85. The paper analyzes whether Small Island...

According to Keynesian economics wisdom, government debt has an effect on the economy since consumers see government debt as net wealth. However, according to the debt neutrality hypothesis of Ricardo (1817), popularised by Barro (1974), such effects would be absent. This paper’s results,...

According to conventional macroeconomics, public debt has a significant effect on the economy since consumers see public debt as net wealth, however, according to the Ricardian Equivalence hypothesis, that effect would be absent. This paper’s results, obtained from Euler equation estimations,...

This 2004 Article IV Consultation highlights that with growth proceeding at a steady pace of 2.6 percent during 2004, the Spanish economy has weathered the slowdown in the European Union relatively well. The external current account is estimated to have widened to some 4¼ percent of GDP in...

Poverty risk is most marked for children, displaced persons and returnees, unemployed, and people with low education. Basic goals of the macroeconomic framework of the mid-term development strategy of Bosnia and Herzegovina are to reduce the overall public expenditures, lower the public debt,...

This Selected Issues paper on France underlies public intervention in financial markets. Econometric analysis indicates that in the long term, consumption tracks disposable income closely but is also affected by wealth effects. A counterfactual exercise suggests that a lower return to experience...