We look at the effect of exchange rate regimes on fiscal discipline, taking into account the effect of underlying political conditions. We present a model where strong politics (defined as policymakers facing longer political horizon and higher cohesion) are associated with better fiscal...

This paper takes a deep and comprehensive look into the firm-level behavioral reactions to a massive transportation cost shock. Exploiting rich data encompassing the universe of Portuguese private firms and a natural experiment we find that the introduction of tolls on previously toll-free...

This paper characterizes monetary and exchange-rate policies during successful and unsuccessful fiscal adjustments by analyzing the OECD economies over the period 1970 to 1998. We find that successful adjustments are almost always preceded by large nominal and real exchange rate depreciations...

Expanding regional eligibility in the access to grants can have important consequences for the performance of firms. We examine a quasi-natural experiment that consisted of a redrawing of administrative areas intended to increase accessibility to European Union (EU) funds using a rich...

In this paper we use the widely held assumption that left-wing cabinets favor a larger size of government to answer the question: does the pair cabinet ideology-fiscal action affect the persistence of major fiscal adjustments? For a panel of OECD countries from 1960 to 1995, we find that left...