Accumulating debt raises concerns about its implications for macroeconomic stability. This paper sheds light on the implications of high indebtedness for the macroeconomic volatility by identifying the main drivers of the evolution of debt in a set of countries. The country choice was based on...

I analyze how the introduction of financial frictions can affect the trade-off between output stabilization and inflation stability and whether, in the presence of financial frictions, the optimal outcome can be realized or approached more closely if monetary policy is allowed to react to...

Recent developments in Canada, the United Kingdom, the euro area, Japan, Sweden, Switzerland and the United States have triggered a debate on whether monetary policy is effective when the nominal interest rate is close to zero. In this context, the monetary authority is no longer in a position...

The COVID-19 pandemic triggered renewed interest in the use of different fiscal spending and transfer programmes to address the worsening conditions and deepening inequalities within the labour markets. This paper reviews the role of specific fiscal spending and transfer programmes in shaping...

Out of four major structural changes affecting the US economy - namely a rising share of skilled workers, skill-biased technological change, decreasing progressiveness of taxation and productivity slowdown - we show that the decline in productivity growth not only is the main driver of the...

This study provides a critical assessment of various fiscal policy instruments - including direct public job creation, active labour market and care policies, social protection measures and tax reforms - and their effectiveness in supporting the most vulnerable groups in the labour market....

Concerns about widening inequality have increased attention on the topic of equality of opportunities and intergenerational mobility. We use data from the National Longitudinal Survey of Youth to analyse how educational and income mobility has evolved in the United States of America. We show...

Since the onset of the financial crisis, consumption has fallen in many economies. This paper presents a small-scale DSGE model with occasionally binding credit constraints. Indebted households start facing credit constraints when the value of their main asset, which we assume to be housing,...