We document large differences between the United States and France in allocations of consumption expenditures and time … in accounting for the differences in the allocation of time, the consumption tax and social security are more important … regarding allocation of expenditures. Adopting the U.S. consumption tax decreases welfare in France, and adopting the U …

We ask whether cuts of government consumption lower or raise the sovereign default premium. To address this question … sovereign default premia, government consumption, and output. We find that whether austerity pays off depends on a) initial …