This paper provides new evidence on the effects of government spendingshocks and the fiscal transmission mechanism in the euro area for the period1980-2008. Our contribution is two-fold. First, we investigate changes in themacroeconomic impact of government spending shocks using...

This paper assesses the role of sovereign risk in explaining macroeconomic fluctuations in Turkey. We estimate two versions of a simple New Keynesian small open economy model on quarterly data for the period 1994Q3-2008Q2: a basic version and a version augmented by a default premium on...

State-contingent tax policy can generate stabilization gains if an economy is subjectto occasionally binding financial constraints. The aim of this paper is to assesswhether that claim can be supported in a small open economy real business cyclemodel with liquidity constraints on the consumer...