This doctoral thesis addresses in a sequence of five essays the question how fiscal policy and economic output are interrelated in emerging Europe and how this relationship is shaped by the respective politico-economic environment and the individual-level support for economic reforms. Following...

This paper presents an analysis of how alternative models of the business cycle can replicate the stylized fact that large governments are associated with less volatile economies. Our analysis shows that adding nominal rigidities and costs of capital adjustment to an otherwise standard RBC model...