The European Union's new fiscal framework aims to incentivise public investment and reforms by offering the option to extend the four-year fiscal adjustment period to seven years, thereby lowering the average annual fiscal adjustment requirement. Investments and reforms proposed by EU countries...

The Euro-area poses a unique problem in evaluating policy: a currency union with a shared monetary policy and country-specific fiscal policy. Analysis can be further complicated if high levels of public debt affect the performance of stabilization policy. We construct a framework capable of...