This paper first searches for the drivers of the Greek depression in the aftermath of the 2007-8 global crisis and in turn looks for engines of sustained growth. We use a micro-founded macroeconomic model calibrated to Greece. Our simulations show that the adopted adjustment program (namely, the...

This paper studies fiscal policy effects in developing countries with external debt and sovereign default risks. State-dependent distributions of fiscal limits are simulated based on macroeconomic uncertainty and fiscal policy specifications. The analysis shows that expected future revenue plays...

This paper studies the impact of the state-dependent risk of a government default on the correlation of the scal balance and current account. We use a small open economy model where nonlinear risk premia arise endogenously when the government operates close to its scal limit, i.e. the maximum...

This research tackles a gap in existing literature by offering empirical insights into the effectiveness of utilizing the Gold and Foreign Exchange Contingency Reserve Account (GFECRA) in overseeing total domestic debt, thereby enhancing our comprehension of fiscal policy implications and debt...

The purpose of the study is to test for debt sustainability as well as assess the impact of public debt on economic growth in Ghana using annual time series data spanning from 1970 to 2014. The study employed the fiscal reaction function suggested by Bohn (1998) to test for the sustainability of...

During 2004-06 Bolivia experienced a five-fold increase in oil revenues due to tax/contractual innovations, higher prices and larger volumes at the same time that a multi-lateral debt reduction initiative trimmed roughly one third of the public external debt. The political economy setting of...

This paper studies the effects of government capital accumulation on sovereign debt default risk and debt restructuring renegotiation outcomes when government has limited ability to extract revenues from households. We develop a quantitative dynamic stochastic general equilibrium model of...

Wynne Godley and Hyman Minsky were two macroeconomists who ‘saw the crisis coming'. This paper develops a simple macrodynamic model that synthesises some key perspectives of their analytical frameworks. The model incorporates Godley's financial balances approach and postulates that private...

This paper aims to explain why fiscal multipliers are generally low, even close to zero, in emerging economies (EMEs). Our explanation jointly relies on the behavior of the exchange rate following a fiscal shock and on the proportion of external debt denominated in foreign currency, which is...