We investigate what happens when the fiscal authorities do not react to rising public debt so that the unpleasant task of fiscal sustainability falls upon the Central Bank (CB). In particular, we explore whether the CB's bond purchases in the secondary market can restore stability and...

Chapter 1. Introduction -- Chapter 2. Fiscal Policy and Government Debt in the 21st Century -- Chapter 3. European Debt Crisis and Flaws of the Euro Area -- Chapter 4. Sovereign Debt Channels in the Euro Area -- Chapter 5. European Fiscal and Debt Union -- Chapter 6. Specific Characteristics of...

Fiscal policy constitutes a key tool for business cycle stabilisation next to monetary policy. In this context, having a well-suited macroeconomic model for analysing fiscal policy at a central bank is of primary importance. This paper documents the fiscal block of the ECB-BASE, which is a...

The recent spike in inflation, unprecedented in the history of the Economic and Monetary Union (EMU), has had major consequences for all areas of the economy, including public finances. This paper aims to provide a detailed assessment of the effects of high inflation on fiscal accounts in the...