We assess the macroeconomic effects of a sovereign restructuring in a small economy belonging to a monetary union by simulating a dynamic general equilibrium model. In line with the empirical evidence, we make the following three key assumptions. First, sovereign debt is held by domestic agents...

This paper compares the effectiveness of different fiscal policy instruments-carbon pricing, fiscal incentives for private green investments, and public green investment-in supporting a green recovery that is also fiscally sustainable. It argues that relying on carbon pricing or green...