This article sets out to empirically determine whether the ratio between debt and gross domestic product (GDP) affected real and nominal variables such as the demand for money, the nominal interest rate, investment and the output gap, between January 1995 and March 2008. The specific aim is to...

The global financial crisis has led to a sharp deterioration of EU countries' public finances. Views are split regarding the most appropriate consolidation strategy to follow, in particular considering: the timing of fiscal consolidation in relation to the path of economic recovery reflecting...

Credible fiscal plans that aim at restoring fiscal sustainability will be essential to counter the present increase in debt levels all across Europe. The macroeconomic scenario of such plans will be crucial. This paper assesses whether there is any advantage in delegating (part of) such power to...

This paper presents a dynamic stochastic general equilibrium model with nominal rigidities, capital accumulation and finite horizons. Our New Keynesian framework exhibits intergenerational wealth effects and is intended to investigate the macroeconomic implications of fiscal policy, which is...

We examine the effect of monetary and fiscal policies on yields on short- and long-term indexed bonds. We extend the current literature by providing evidence about a period in which the government adopted declining inflation and deficit targets. In such cases the policy shift could be perceived...

This paper analyzes the impact of public debt on financial efficiency in an overlapping-generations model. We argue that public debt may reduce intermediation costs by increasing the collateral of entrepreneurs. This effect is stronger, the stronger the non-Ricardian component of public debt,...

For the evaluation of macroeconomic policies Colombian authorities rely heavily, if not exclusively, on the operational framework known as the Financial Programming Model developed by the IMF in the 1950s. Based on this static framework, the formulation of fiscal policy in the country, just as...

Working with a typical macroeconomic model we investigate the superiority of timeless perspective policy design. We show that when fiscal policy matters the timeless perspective policy design can cause instability of the economy

This paper evaluates the Stability and Growth Pact. After briefly examining the rules in place and the experience so far, the Pact is analysed from a political economy perspective, focusing on the choice of hard versus soft law and drawing inferences from characteristics of successful fiscal...

The paper considers the implications for the EU accession candidates of Central and Eastern Europe of the fiscal-financial constraints imposed by the Stability and Growth Pact and the Maastricht Treaty. Our findings apply also to those current EU members whose initial conditions (e.g.,...