type="main" xml:lang="en" <title type="main">Abstract</title> <p>I employ a parsimonious model with learning, but without conditioning information, to extract time-varying measures of market-risk sensitivities, pricing errors and pricing uncertainty. The evolution of these quantities has interesting implications for...</p>

Since the seminal work of Oates (1972) on scal federalism, a central question of public finance has been which level of a federation should be as- signed the provision of public goods. In this paper we study the problem of a government that is to choose the optimal...

We survey recent empirical evidence on monetary policy rules, and find that the emphasis in the political economy literature on institutional design (e.g. central bank independence and inflation targeting) is exaggerated. Formal institutional reform seems neither a necessary nor a sufficient...

We present empirical evidence on the forces driving real exchange rates in the longrun. Using data from three industrialised countries, we find support for the hypothesis that productivity and fiscalshocks matter. There is also evidence, however, that the impact of fiscal shocks only matters in...

The information content of broad money M3 for future GDP inflation in the euro area is investigated from a number of perspectives. Firstly, tests that money does not Granger-cause prices are conducted within a cointegrated VAR system comprising real M3 holdings, real GDP, inflation and short-...

We examine Italian inflation rates and the Phillips curve with a very long-run perspective, one that covers the entire existence of the Italian lira from political unification (1861) to Italy’s entry in the European Monetary Union (end of 1998). We first study the volatility, persistence and...

This paper reconsiders the role of macroeconomic shocks and policies in determining the Great Recession and the subsequent recovery in the US. The Great Recession was mainly caused by a large demand shock and by the ZLB on the interest rate policy. In contrast with previous findings, the...

This paper investigates the role of fiscal policies over the aggregate EMU business cycle. Previous studies, based on the assumption of non-separability between public and private consumption, obtain a large public consumption multiplier, a small fraction of non-Ricardian households and,...