I analyze how lack of commitment affects the maturity structure of sovereign debt. Ex post, the government trades off the gains from default induced redistribution against the cost of defaulting. Ex ante, the government issues debt of various maturities to raise an exogenous revenue requirement....

We shed light on the function, properties and optimal size of austerity using the standard sovereign debt model augmented to include incomplete information about credit risk. Austerity is defined as the shortfall of consumption from the level desired by a country and supported by its repayment...

We shed light on the function, properties and optimal size of austerity using the standard sovereign debt model augmented to include incomplete information about credit risk. Austerity is defined as the shortfall of consumption from the level desired by a country and supported by its repayment...

The recent sovereign debt crisis has rekindled the debate on the role of austerity. By austerity, we mean consumption levels below those desired and supported by a country's repayment capacity. We shed light on the function, properties, and optimal size of austerity by developing a model that...

We analyze the short and long run effects of demographic ageing—increased longevity and reduced fertility—on per-capita growth. The OLG model captures direct effects, working through adjustments in the savings rate, labor supply, and capital deepening, and indirect effects, working through...

Was kann in Europa getan werden, damit Wachstumsprognosen der EU wieder nach oben korrigiert werden und die Wettbewerbsfähigkeit Europas wieder hergestellt wird? Nach Ansicht von Werner Hoyer, Präsident der Europäischen Investitionsbank, sollten die Schaffung günstiger Rahmenbedingungen...

I analyze how lack of commitment affects the maturity structure of sovereign debt. Governments balance benefits of default induced redistribution and costs due to income losses in the wake of a default. Their choice of short- versus long-term debt affects default and rollover decisions by...

We develop a dynamic politico-economic model of public investment where decisions can be made at several levels of government: federal, state, or county. The model predicts that in the absence of internal mobility, the higher level of government would fund all investments that present positive...