The paper reviews some problems in financing the welfare state in the global economy. It is shown that in the new environment, there are several factors which create upward pressure in public expenditures even though the public sector would not extend its activities to now areas. On the other...

This paper develops a model of the relationship between public sector employment, total output and aggregate real demand in market prices, where public employment has a positive productivity effect on private output. Public employment crowds out private employment and output because its increase...

This paper deals with fiscal policy coordination under the Stability and Growth Pact. In particular, it addresses the question of how fiscal policy can be coordinated within EMU, where countries still differ considerably in terms of country-specific shocks and fiscal policy multipliers. To...