In this paper, we elaborate on the notion of effective consumption and its role in determining the outcome of fiscal changes. More specifically, we investigate whether government consumption, by acting either as a complement or a substitute to private consumption, can help explain the...

We show that credit market imperfections substantially increase the government-spending multiplier when the economy enters a liquidity trap. This ?finding is explained by the tight association between capital goods and ?rms?collateral, a relationship that we highlight as the capital-accumulation...

There is an ongoing debate about austerity and stimulus in the Euro zone. Moreover, given the fiscal and financial problems in the region, a default has appeared likely at times. In this context, this paper develops a dynamic stochastic quantitative model of sovereign default with fiscal policy,...

This paper examines the liberalization process in the context of reflecting on the challenges facing China's financial system and possible lessons that can be learned from the experiences of other emerging market economies. Section 1 begins with a brief look at the characteristics of the Chinese...

Per effetto della crisi economica che si è realizzata con particolare intensità nel corso del 2009, molte economie avanzate hanno intrapreso percorsi di risanamento fiscale. Nell'ambito di tali misure un ruolo non trascurabile è rappresentato dagli interventi di riduzione della spesa per il...

The paper analyses the effects of different global developments and the resulting reactions of fiscal policies after the “Great Recession” on the Slovenian economy. We use the macro model SLOPOL8.1, an econometric model of the Slovenian economy, to simulate the effects of different scenarios...

In this paper,we assess the impact ofmajor German structural reforms from1999 to 2008 on key macroeconomic variables within a two-country monetary union DSGE model. Bymany, these reforms, especially the Hartz reforms on the labormarket, are considered to be the root of thereafter observed...

This report details the divergent paths that the world economy may take and their potential effects on Latin America and the Caribbean. Scenarios are constructed employing a modeling exercise that captures the trade, financial and other linkages between the region and the rest of the world....

The recent boom and bust in commodity prices has raised concerns about the impact of volatile commodity prices on Latin American countries’ fiscal positions. Using a novel quarterly dataset─ which includes unique country specific commodity price indices and a comprehensive measure of public...