The suspension of the fiscal rules in Europe and the enactment of NGEU provide an opportunity to rethink the inherited budget orthodoxy. The issue at stake is not only of political economy and institutional changes in the EU. It is also of economic analysis and theory. The coronavirus crisis...

We study gains from introducing a common numerical fiscal rule in a “Union” of model economies facing sovereign default risk. We show that among economies in the Union, there is significant disagreement about the common debt limit the Union should implement: the limit preferred by some...

We assess public finances solvency for Euro Area countries using quarterly data between 1999Q1 and 2020Q4. Through a country-by-country analysis, the answer to the title question is true. For most countries, (i) the primary budget balance reacts positively to the lagged public debt ratio and...

This paper examines the factors that influence the effectiveness of fiscal governance in the EU through a panel of 19 Eurozone countries for the period 1999-2019 using an OLS method. The results show the positive effects of economic growth, inflation and the change in the general government...