This paper argues that although the crisis may have emerged in the financial sector, its roots are much deeper and lie in a structural change in income distribution that has been going on for the past three decades. The widespread increase of inequality depressed aggregate demand and prompted...

This paper describes recent trends on the effectiveness 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,...