The PIGS countries have suffered economic instability and fiscal havoc in the aftermath of the Financial Crisis. We argue this is the consequence of pursuing procyclical fiscal policies. We add a fiscal rule, which varies public spending with the cycle, to an otherwise standard RBC model of a...

This paper revisits the adjustment path of key economic and financial indicators during large current account adjustment episodes in OECD countries, after controlling for discretionary fiscal policy behavior. We find that the drivers of current account deficit reversals differ according to the...

Using cross-country data for developed and developing countries over the period 1980–2007, we study the effects of the Inflation Targeting regime on levels and volatilities of inflation, GDP growth and fiscal imbalances. Our results indicate that the targeting developing countries are...

Wagner's Law is the first model of public spending in the history of public finance. The aim of this study is to assess its empirical evidence in Italy for the period 1960–2008 at a disaggregated level, using a time series approach. After a brief introduction, a survey of the economic...

This paper models the role of monetary policy in the Australian housing market using structural vector autoregression model. Our results show that a contractionary monetary policy significantly reduces housing activity but does not exert any significant negative effect on the real house prices....

This study was conducted to analyze the direct and indirect effects of ethanol policy on livestock production. Results of the theoretical and empirical model indicate the possibility of ethanol policy affecting livestock production in the United States both directly and indirectly, via the...

To theoretically and empirically explore whether social interaction, either local and global, influences the incidence of corruption, we first present an interaction-based model which predicts that the level of corruption is positively associated with social interaction. We then empirically...

Naming and shaming is a frequently applied incentive by supra-national organizations. Although common practice, a mere comparison between the outcome variable is meaningless. The observed outcome variable consists of two parts: (1) a part which is due to the general economic climate and where...

This paper explores the way governments rely on budgets. Budgets are classified with reference to functions (e.g. defence, education, etc.), but expenditure from one budget (e.g. the overseas budget) can prove as effective as expenditure from another budget (e.g. the environment budget) when...

The Stability and Growth Pact (SGP) was established to govern discretionary fiscal policy in the European Monetary Union. This article studies the effects created when there is uncertainty about the members’ commitment to respecting the established deficit limits in the SGP. We will show that,...