We analyse the effectiveness of fiscal policy rules for business cycle stabilisation in a monetary union using a quarterly macro-econometric model of Germany. The simulations compare a deficit target and an expenditure target under a range of supply, demand and fiscal shocks. Their effects are...

Using computational and mathematical modeling, this study explores the tension between too little and too much structure that is shaped by the core tradeoff between efficiency and flexibility in dynamic environments. Our aim is to develop a more precise theory of the fundamental relationships...