With this paper, our objective is to empirically study public debt sustainability by estimating a fiscal reaction function where the primary balance relative to GDP is assumed to be a function of the public debt to GDP ratio of the previous year and of other macroeconomic variables. In...

This paper empirically studies non-linearities in debt sustainability analysis by resorting to the modern estimation technique of panel smooth transition regression (PSTR). We assess euro area debt sustainability by analysing the reaction of the primary balance to changes in public debt,...

This paper presents an endogenous growth model with public capital and public debt. The government finances productive and unproductive public spending through income taxation and through public deficits. In addition, the primary surplus to GDP ratio is set such that it is a positive function of...

By contrasting endogenous growth models with facts, one is frequently confronted with the prediction that levels of economic variables, such as R&D expenditures, imply lasting effects on the growth rate of an economy. As stylized facts show, the research intensity in most advanced countries has...

We present a macroeconomic growth model in which investment in physical capital exhibits positive externalities which raise the stock of knowledge. Treating physical capital and knowledge as two separate variables, we show that the model can generate endogenous growth. It is demonstrated that...

Introduction -- Sustainable Public Debt: Theory and Empirical Evidence -- Debt and Growth: A Basic Endogenous Growth Model -- Productive Government Spending, Public Debt and Growth -- Government Debt and Human Capital Formation -- Debt and Growth: Empirical Evidence -- Conclusion.

The European Union has set up a fund in order to compensate countries for damages resulting from COVID-19 that hit the economies in an asymmetric way. We argue that payments should be based only on relative damages, expressed as losses relative to GDP, and any distribution mechanism implying...

This paper empirically studies non-linearities in debt sustainability analysis by resorting to the modern estimation technique of panel smooth transition regression (PSTR). We assess euro area debt sustainability by analysing the reaction of the primary balance to changes in public debt,...