In recent years the growth pattern of most Southern European countries has been disturbed, as those countries are suffering from economic crises that go beyond the usual business cycle. In this paper, we develop a dynamic general equilibrium model of market and political power interactions that...

In this paper we present stylized facts of the Greek economy that characterize the causes and the consequences of its ongoing crisis. Then, we offer an explanation that can account for those causes and consequences. This explanation is based on the view of Greek society as consisting of two...

The wage premium in the public sector, as measured by the ratio of the average wage rate in the public sector relative to the average wage rate in the private sector, varies considerably across developed economies. And, varies in some developed economies over large periods of time. Further, this...

This paper provides a coherent, logical framework that connects the main issues concerning fiscal policy in an economic and monetary union. The focus is on normative issues within the European Union.

The answer to this question is "yes". We re-examine noncooperative and cooperative equilibria under perfect capital mobility. To this end, we develop a two-country optimal growth model with endogenous national fiscal policies. The channel for interdependence is distortionary income taxes. We...

In this paper, using a dynamic panel of 21 OECD countries, we find that, unlike the other OECD countries in the sample, wage setting institutions, competition conditions, public finances, and external imbalances can account for the behavior of the public sector wage premium (WPR) and the...