Many consumers below the top of the distribution of a representative population by cognitive abilities barely react to monetary and fiscal policies that aim to stimulate consumption and borrowing, even when they are financially unconstrained and despite substantial debt capacity. Differences in...

Unconventional fiscal policy uses announcements of future increases in consumption taxes to generate inflation expectations and accelerate consumption expenditure. It is budget neutral and time consistent. We provide preliminary evidence for the effectiveness of such policies using changes in...

What are the effects of changes in taxation and new types of mortgages on the real economy? - The case of Denmark during the 00's What are the effects of introducing interest-only, flexible-rate mortgage contracts and a tax-freeze on housing wealth for the real- and financial economy? I study...

The paper analyses the effectiveness of fiscal tools at the zero lower bound (ZLB). A non-linear New Keynesian DSGE model with occasionally binding constraints on monetary policy and borrowing is applied. When the ZLB binds in a liquidity trap, government spending becomes more effective in...

Intertemporal substitution is at the heart of modern macroeconomics and finance as well as economic policymaking, but a large fraction of a representative population of men - those below the top of the distribution by cognitive abilities (IQ) - do not change their consumption propensities with...

The volume collects the essays presented at the 15th Workshop on Public Finance organised by Banca d'Italia in Perugia from 4 to 6 April 2013. The workshop focused on the link between fiscal policy and macroeconomic imbalances and comprised four sessions. The first session concentrated on the...

In the current context where the limited role for monetary policy instruments apparently endows fiscal policy with higher effectiveness, European fiscal policy authorities are rather constrained by the fact of most countries being struggling against recessions together with the need to put...

We document that a large fraction of a representative population of men—those below the top of the distribution by cognitive abilities (IQ)—barely reacts to measures of monetary and fiscal policy that aim at influencing their leverage and durable spending decisions. To the contrary, high-IQ...

Macroeconomic models that omit the shadow economy systematically mis-forecast and mis-measure the effect of fiscal –in particular tax– policy on economic activity and tax revenue. We add an informal sector to the Bank of Greece DSGE model and use the actual package of fiscal consolidation...

An assessment is presented of whether Greece's current plight is a harbinger of similar adverse conditions likely to directly impact the United States in the intermediate- to long-term future.Long-term deficits projected for 2020 and beyond, under the assumption that the economy is in full...