In this paper, based on a quarterly dataset of G7 countries with the application of a nonlinear ARDL model we test for the presence of a short-run and long-term asymmetry in the relationship between government spending and economic activity. The main aim of this study is to analyze the...

Reforming the debt brake (Schuldenbremse) is often understood to require constitutional change. Frequently overlooked, however, is that a crucial part of the debt brake is governed by ordinary law, namely the cyclical component (Konjunkturkomponente). By allowing for more or less net borrowing...

This article employs structural break tests of unknown point with nuisance parameter to test for possible break in China's business cycle volatility and identifies that the last quarter of 1995 is the significant structural break point. The paper then constructs a counterfactual analysis to...

Differences across countries or decades in the countercyclical stance of fiscal policy can help identify whether the growth in government spending affects output growth and so speeds recovery from a recession. We use the heterogeneity in the government-spending reaction functions across twenty...