This article is devoted to examining the appropriate use of fiscal policy in the presence of private savings and interest rate offsets. The authors measure these effects in the Australian context and consider the implications of their empirical findings for the conduct of macroeconomic policy...

With the advent of EMU, monetary policy can no longer be used to prevent housing market bubbles in regional economies such as Ireland or Spain. However, fiscal policy can and should be used to achieve the same effect. This paper shows that the advent of EMU relaxed existing financial constraints...

This paper looks at some of the key fiscal questions related to Scottish independence, drawing on detailed analysis of household survey data, official data on public spending and revenues, and using a model of the UK and Scotland's public finances over the next half a century. We examine how and...

The financial crisis that started in the summer of 2007 and worsened in the autumn of 2008 has involved a repricing of risk and a reduction in the level of potential output in the OECD of between 3 and 5 per cent. In addition it has caused a major recession, leaving output gaps in the UK, the US...

Assessing the progressivity of a fiscal system is relevant to develop a global idea on the extent of redistribution. In this paper we assess the evolution of progressivity over time and how economic shocks and government fiscal policy affects its design. The social performance of fiscal...

We analyze why the Eurozone crisis increasingly resembles Latin America’s lost decade instead of Asia’s phoenix miracle, emphasizing the roles of the real exchange rate, the external environment, and debt restructuring. In addition, we contrast the adjustment to housing bubbles in Ireland,...

The nature of fiscal policies was changed dramatically by the creation of the Eurozone. While prior to the start of the Eurozone, national governments were sovereign in that they could back up the issue of debt by the issue of money, they lost this sovereignty in the Eurozone. This had dramatic...

We present a theoretical model of a parliamentary democracy where electoral competition inside coalition governments induces higher spending than under single party governments. Policy preferences of parties are endogenous and derived from opportunistic reelection motives. The electoral rule...

In this paper, we model - quantitatively – a possible realistic interaction between a taxpayer and his Government. We formalize, in a general setting, this strategic interaction. Moreover, we analyze completely a particular realistic sample of the general model. We determine the entire payoff...

The aim of this paper is to study empirical evidence supporting the hypothesis that discretionary fiscal policy is asymmetric over the business cycle in Uruguay. We estimate fiscal reaction functions covering annual data from 1970 through 2009, in which the dynamics of fiscal balance is due to...