We study the evolution of the public debt to GDP ratio during 40 fiscal consolidation episodes in 21 OECD countries in 1980-2008. We test within a multivariate regression framework seven hypotheses put forward in the literature on the success or failure of consolidation programmes. These...

We study the effects of pension reform in a four-period OLG model for an open economy where hours worked by three active generations, education of the young, the retirement decision of older workers, and aggregate per capita growth, are all endogenous. Next to the characteristics of the pension...

We study the effects of pension reform in a four-period OLG model for an open economy where hours worked by three active generations, education of the young, the retirement decision of older workers, and aggregate growth, are all endogenous. Within each generation we distinguish individuals with...

We analyze the impact of the composition of fiscal policy on employment and long-run growth. Our theoretical model builds on Barro (JPE, 1990) which we extend by endogenizing the decision to work and by allowing three kinds of government expenditures and three kinds of taxes. The model explains...

Existing monetary growth theories predict either negative or neutral effects from inflation on human capital. In this paper we develop a simple alternative model, which can generate positive effects. Our empirical analysis for 93 countries in 1975-1995 tends to confirm these positive effects....

This paper uses scanner data from a large euro area retailer. We extend Deaton and Muellbauer’s Almost Ideal Demand System to estimate the price elasticity and curvature of demand for a wide range of products. Our results support the introduction of a kinked (concave) demand curve in general...

Empirical studies typically find that private consumption is much more sensitive to changes in current disposable income than is predicted by Hall's (JPE, 1978) permanent income hypothesis. Standard explanations for this "excess sensitivity" of private consumption refer to liquidity constraints...

In this paper we analyse the impact of distortionary taxes, transfers related to structural nonemployment and productive government expenditures on employment and long-run growth. Our theoretical model builds on Barro (JPE, 1990) which we extend by endogenizing the decision to work and by...

This paper shows that inflation crises may stimulate the accumulation of human kapital. A crucial idea is that high inflation undermines total factor productivity, which makes working and physical capital formation less attractive. If young agents consider high inflation to be temporary, they...

This paper studies the determinants of the level and the evolution of per capita hours worked in a panel of OECD countries since the 1970s. Following Pesaran (Econometrica, 2006), our empirical strategy allows for the possibility of cross-sectionally correlated error terms due to unobserved...