This paper uses the SVAR methodology to investigate the effects of public investment on growth, and more specifically, the effects of the introduction of a golden rule of public finance. We extend the existing literature by estimating a model of the British economy that takes into account long...

The paper provides an explanation to the adoption of balanced-budget rules by politicians, instead of golden rules. In a model that includes voters' preferences that are skewed by the history of the budget structure, and fiscal rules on the budget, we show that incumbents favor a distorted...

We study whether the adoption of inflation targeting (IT) has constituted a regime switch in Sweden using a Markov-Switching VAR technique. We assess, based on two different specifications, the relative preference for inflation in the monetary reaction function and the capacity of IT to reduce...

Whereas existing literature on inflation targeting has up to now focused on its impact on macroeconomic variables, this paper aims at investigating empirically whether the adoption of this framework has changed the preferences of the central banker. Using Markov-Switching VAR and Time Varying...

Using a four-country Mundell-Fleming model including portfolio and wealth effects, we explore the question whether some types of policy coordination could improve the outcomes of a financial shock like the Asian crisis. Time-consistent equilibria are computed: a Nash equilibrium, a target zone...

The purpose of this note is to compare the characteristics of the actual Stability and Growth Pact with that of a European "modified golden rule." The latter would consist in achieving in each EU country a cyclically-adjusted net-of-public-investment balance. The benchmark for comparison is the...

This paper examines the distributional effects of monetary policy, either standard, nonstandard or both, on income inequality in 10 EA countries over the period 2000-2015. We use three different indicators of income inequality in a Panel VAR setting in order to estimate IRFs of inequality to a...

Empirical evidence on inflation targeting (IT) outcomes has been mixed so far, mainly because most of the assessments have been based on a control group methodology in a period where differences between IT and non-IT countries were insignificant. In this paper, we study IT impact over time and...

This paper describes recent trends on the efficiency of stabilisers in the European Union. Using both macro evidence on the cyclical sensitivity of budget deficit to economic activity, and micro evidence on the tax and expenditure profiles, we conclude, in agreement with the recent literature,...

This paper addresses the issue of whether and by how much public investment or public capital can enhance economic performance. In comparison with the literature on the subject, we apply many different methodologies to answer these questions. A VAR model (for France, Italy, Germany, the UK and...