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We study the impact of the interaction between fiscal and monetary policy on the low-frequency relationship between the fiscal stance and inflation using crosscountry data from 1965 to 1999. In a first step, we contrast the monetary-fiscal narrative for Germany, the U.S. and Italy with evidence...
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How does international tax competition affect fiscal democracy? To what extent does it constrain the autonomy of democratic governments in choosing the level and structure of national taxation? While tax competition has not reduced the level of total taxation in OECD-22 countries, it has revenue...
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Recent macro developments in the euro area have highlighted the interactions between fiscal policy, sovereign debt, and financial fragility. We take a structural macroeconomic model with frictions in the financial intermediation process, in line with recent research, but introduce asset choice...
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Keynesian theory suggests that a reduction in government expenditure has a negative effect on private demand and … therefore on output. Contrary, neoclassical theory argues that reduced public expenditure makes room for an expansion of the … variable reflecting the sustainability of the debt path, as theory suggests. We find that the deficit influences the transition …
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