To minimize deadweight losses, tax rates should vary unpredictably so agents cannot rearrange their work and consumption habits. As a result, optimally set tax rates will be a nonstationary time series or, put differently, changes in the tax rate will be unpredictable. This paper identifies...

We focus on the response of primary fiscal balance to interest payments and borrowing costs on Serbian public debt before and in the aftermath of the global financial crisis. Our analysis reveals: i) policy makers financed up to 50% of each percentage point increase in interest payments to GDP...

In this paper, relations between public debt, economic growth, and long-term interest rates in Switzerland from 1894 to 2014 are examined. For this purpose, an original long-term dataset on the general gross public debt in Switzerland, namely the aggregation of the Confederation gross debt, the...