We study the effects of debt-financed fiscal transfers in a general equilibrium, heterogeneous-agent model of the world economy. In the long run, increases in government debt anywhere raise the world interest rate and increase private wealth everywhere. In the short run, a country with a...

We propose and test a new channel through which fiscal policy changes affect the supply of intermediated credit and the real economy. Lenders that have greater exposure to firms expected to repatriate a significant amount of foreign income as a result of a 2004-2005 U.S. tax holiday subsequently...

The fiscal situation in an economy may have a significant impact on the evolution of Non-Performing loans (NPLs). Austerity measures limit the loan servicing capacity of households and businesses (Perotti, 1996) whereas public borrowing accelerates markedly ahead of sovereign debt and banking...

We develop a theory of banks' liquidity risk management using global games, and characterize banks' optimal balance sheet choices. They use public liquidity as an input to issue more private liquidity to their creditors, and our model predicts and links public and private liquidity premia. Our...

I estimate the present value of local GDP increases by about 11.4 RMB for 1 RMB increase of government spending during 2001-2019 at the prefecture city level in China, where the local governments play an active role in increasing economic growth but are financially constrained. To achieve...

Advocates of Medicaid expansion argue that federal Medicaid assistance to states fosters economic activity, generating positive local multiplier effects. Furthermore, during economic downturns, Congress regularly tweaks federal match rates for state Medicaid spending – including during the...

Ghana shows remarkable differences in employment and welfare between the southern and northern regions. The promotion of policy focus on the development of the northern regions requires the elaboration of specific databases describing the regional economies. Hence, this work outlines the...

To benefit from the newly established EU Recovery and Resilience Facility (RRF), the Visegrád countries - Czechia, Slovakia, Hungary, and Poland - have submitted their national recovery plans. The Czech and Slovak plans have already been approved by the EU, paving the way for the up-front...

This paper reviews the main transmission channels of an environmental tax reform shifting the tax burden from labour to carbon emission. The analysis uses a simple open-economy macro model and estimates dynamic environmental tax as well as personal income tax multiplier effects on output and...