In the light of the recent financial crisis, we investigate the effects generated by limited asset market participation on optimal monetary and fiscal policy, where monetary and fiscal authority are independent and play strategically. We find that limited asset market participation strongly...

This paper investigates the effects generated by limited asset market participation on optimal monetary and fiscal policy, where monetary and fiscal authorities are independent and play strategically. It shows that: (i) both the long run and the short run equilibrium require a departure from...

We build a comprehensive database that categorizes COVID-19 fiscal measures announcements in 12 European Union countries into 7 distinct spending categories. Through our empirical analysis, we investigate the impact of these support packages on the economy. Overall, the fiscal measures played a...