Forni, Lorenzo; Gerali, Andrea; Pisani, Massimiliano - In: Journal of Economic Dynamics and Control 34 (2010) 9, pp. 1791-1812
We simulate a currency union dynamic general equilibrium model to assess the macroeconomic implications of permanently reducing the public debt-to-gross domestic product (GDP) ratio in euro area countries. We obtain the following results. First, tax distortions are quantitatively significant....