Implementation of fiscal surveillance rules relies heavily on the proper interpretation of legal terms, creating a need to infuse economic insight into legal analysis. Rigid legal application of fiscal deficit rules may curtail structural reforms, as reforms can go against fiscal consolidation...

Given the weak economic performance of many countries since the recent crisis, there is an increasing need for structural reforms aimed at promoting long-run economic growth. Structural reforms can entail short-run output costs unless offset by a demand expansion. When monetary policy is...

We construct a model of a monetary union to study fiscal consolidation in the Periphery of the euro area, through cuts in public sector wages or hiring when the nominal interest rate is constrained at its lower bound. Consolidation induces a positive wealth effect that increases demand, as well...