Many researchers have been focused for decades on the issue of public debt considering its effect on fiscal sustainability in the long run. There is a recent body of research showing that the current financial crises will lead to a considerable increase of public debt in a number of advanced...

The impact of fiscal policy on economic growth is a complex and contradictory topic in finance debates. Government influences real economy through the impact of public revenues and expenditures on the quantity and quality of production factors, labor and capital. High taxation for supporting big...

The current economic context brings new challenges for all countries in order to take action for fiscal adjustment, as a reaction for decreasing of public revenues, through lowering the tax base and the capacity to collect taxes, and for the inability to adjust the public expenditures. Fiscal...

In the setting of a dynamic general equilibrium model we ask the following question: What happens if the interest rate is settled exogenously in a level that differs from the one which emerges from equilibria in the markets? Although the subject of the setting of the interest rate by an external...

I construct a model of a small open economy in which government spending is necessary to mitigate transaction cost. This provides a simple raison d’etre for a government and generates features many sovereign default models do not have: taxes and government spending. Even though the government...

Many people are in danger of missing out on the welfare state that they helped to create. Many people are also missing out on having the chance of being a citizen in a welfare state, something that has been promised. Obviously we are talking about the Old EU Member states and of the New EU...

Tanzi and Schuknecht (1997) pointed out that one of the key features of welfare state is to run large fiscal deficits and public debt. This can be explained considering the rise of the social transfers that led to an overall increase of the total government spending. Growing public debt can...

The present paper integrates the empirical research on preference for redistribution. We analyze the influence of individual and socio-economic characteristics, beliefs, social identity and social class on individual preferences for redistribution. Macroeconomic conditions and the relative size...

Forecasts are an inherent part of economic science and the quest for perfect foresight occupies economists and researchers in multiple fields. The release of economic forecasts (and its revisions) is a popular and often publicized event, with a multitude of institutions and think-tanks devoted...

The nature of the relationship between asset price movements and monetary policy is a currently hotly debated topic in macroeconomics. We analyse that relationship using a standard dynamic stochastic general equilibrium model, augmented by an equation featuring the asset prices deviations from a...