This paper explores the link between default risk and fiscal procyclicality. We show that countries with higher sovereign risk have a more procyclical fiscal expenditure policy, which is driven mostly by transfers. We build a small open economy model with income inequality, social transfers, and...

This paper explores the link between default risk and fiscal procycliality. We show that countries with higher sovereign risk have a more procyclical fiscal expenditure policy, which is driven mostly by transfers. We build a small open economy model with income inequality, social transfers, and...

Transfers have recently become the most important fiscal policy tool of the U.S. Government. Moreover, within the transfer category, refundable tax credits have reached the same magnitude as unemployment insurance, yet little research documents the macroeconomic implications of tax credits. The...

En este trabajo se presenta nueva evidencia acerca del efecto que la política monetaria tiene sobre la inversión y la financiación de las empresas en Estados Unidos y en el Reino Unido. Las empresas más jóvenes y que no pagan dividendos son las que muestran la mayor, —y estadísticamente...

We study the effects of negative interest rate policies (NIRP) on the transmission of monetary policy through cross-border lending. Using bank-level data from international financial centres - the United Kingdom, Hong Kong and Ireland - we examine how NIRP in the economies where banks have their...

We provide new evidence on how monetary policy affects investment and firm finance in the United States and the United Kingdom. Younger firms paying no dividends exhibit the largest and most significant change in capital expenditure - even after conditioning on size, asset growth, Tobin's Q,...