Perceived wisdom typically corroborates ‘useful’ Keynesian-type of public spending to be welfare-improving if output (or GDP) increases, i.e. a positive fiscal multiplier. I show a contrarian result which suggests that welfare can increase despite a fall in output due to fiscal expenditure....

In managed floats, central banks often intervene in the foreign exchange market to obtain politically desirable exchange rates. How this is done has remained totally opaque although central banks are likely to adopt a satisfying rather than optimizing strategy since they need to intervene...