Unsustainable levels of debt for some European economies is causing enormous strain in the Euro area. How to tide over the debt crisis seems to be the most important objective the European policy makers are currently facing. We use a dynamic general equilibrium closed economy model to compute...

The aim of this paper is to analyze the relationship between welfare expenditure by government and unemployment outcomes. Using a panel of 34 OECD countries from 1980 to 2010 and a two-way fixed effect model for panel data subject to endogeneity test and persistence test, the results of the...

The textbook response to deteriorating economic performance is monetary easing, the lowering of official interest rates. When the financial and economic crises hit Europe in 2008, however, monetary policy had very little room in most European countries, as the central bank interest rates were...

This paper uses a structural, large dimensional factor model to evaluate the role of 'news' shocks (shocks with a delayed effect on productivity) in generating the business cycle. We find that (i) existing small-scale VECM models are affected by 'non-fundamentalness' and therefore fail to...

This paper uses the old-Keynesian representative agent model developed in Farmer (2010) to answer two questions: 1) do increased government purchases crowd out private consumption? 2) do increased government purchases reduce unemployment? Farmer compared permanent tax financed expenditure paths...

In this article we quantify the aggregate, distributional and welfare consequences of investment expensing and progressivity in flat-tax reforms of the United States economy. We find that investment expensing as in the Hall and Rabushka type of reform brings about sizable output gains and a...

We use micro data from the U.S. Internal Revenue Service to document how households' tax liabilities vary with income, marital status and the number of dependents. We report facts on the distributions of average and marginal taxes, properties of the joint distributions of taxes paid and income,...

The Stipulations of Treaty of Maastricht concerning the Monetary and Economic Union offer a new dimension to the politics of general taxation, by strict limitation of the governments’ possibility on financing the public outgoings by loans. The Accord for Steadiness and Development foresees...

This article analysis the concept of fiscal pressure and fiscal optimum. A comparative study of the fiscal pressure between Romania and the other EU member states has also been made. The academic literature analyzes the specific problem of the fiscal pressure from all points of view and the...

Severely affected by the crisis, considered as the deepest one since the Great Depression between 1929-1933, the European Union’s economy has recorded the sharpest decline in its history starting with the end of 2007. In response to this downturn, interventions included implementing the...