We use sovereign debt rating estimations from Afonso, Gomes and Rother (2009, 2010) for Fitch, Moody's, and Standard & Poor's, to assess to what extent the recent fiscal imbalances are being reflected on the sovereign debt notations. We use macro and fiscal data up to 2009, and macro and fiscal...

In an OCDE panel, for the period 1970–2010, we assess the effects of fiscal consolidation episodes, with four different definitions. Our results reveal that lower final government consumption increases private consumption in three out of the four approaches, when a fiscal consolidation occurs,...

We apply recent panel cointegration methods to a structural equation between government expenditure and revenue. Allowing for multiple endogenous breaks and after computing appropriate bootstrap critical values, we conclude for fiscal sustainability in the overall EU15 panel

Using alternative approaches to determine fiscal episodes, I assess expansionary fiscal consolidations in Europe, via panel models for private consumption. There is some concurring evidence for several budgetary spending items while the asymmetric effects of fiscal episodes do not seem to be...

The possibility of the so called "non-Keynesian" was illustrated by several fiscal episodes in Europe during the last two decades, giving rise to a growing body of both theoretical and empirical literature. The purpose of this paper is twofold. First, a simple two period model for private...