This paper studies the sustainability of fiscal policy for selected Euro-area countries. We focus on those countries that either have a high debt to GDP ratio (Italy) or have recently violated the Maastricht treaty by permitting more than three percent of the deficit to GDP ratio (France,...

In this note we consider an economic union consisting of sovereign national states. An asymmetric shock hits the union and as a result it decides to set up a fund in order to compensate the countries in the union. We show how sacrifice theory can be used to determine the compensation payments...

The European Union has set up a fund in order to compensate countries for damages resulting from Covid-19 that hit the economies in an asymmetric way. We argue that payments should be based only on relative damages, expressed as losses relative to GDP, and any distribution mechanism implying...

Starting point of this book is the observation that an increase in public debt must be accompanied by a rise in the primary surplus of the government to guarantee sustainability of public debt. The book first elaborates on that principle from a theoretical point of view and then tests whether...

With this paper, our objective is to empirically study public debt sustainability by estimating a fiscal reaction function where the primary balance relative to GDP is assumed to be a function of the public debt to GDP ratio of the previous year and of other macroeconomic variables. In...

This paper empirically studies non-linearities in debt sustainability analysis by resorting to the modern estimation technique of panel smooth transition regression (PSTR). We assess euro area debt sustainability by analysing the reaction of the primary balance to changes in public debt,...

Introduction -- Sustainable Public Debt: Theory and Empirical Evidence -- Debt and Growth: A Basic Endogenous Growth Model -- Productive Government Spending, Public Debt and Growth -- Government Debt and Human Capital Formation -- Debt and Growth: Empirical Evidence -- Conclusion.