Within the context of an agent-based macroeconomic model with dynamic bounded-rational expectations, the most important transmission links between the real sphere of the European economy and the US financial markets crises are simulated: (a) the devaluation of financial assets, (b) global...

In this paper, we study maximizing long-run economic growth trade-off in monetary and fiscal policies in an endogenous growth model with transaction costs. We show that both monetary and fiscal policies are subject to threshold effects, a result that gives account of a number of recent empirical...

We study alternative scenarios for exiting the post-crisis fiscal and monetary accommodation using the model of Angeloni and Faia (2010), that combines a standard DSGE framework with a fragile banking sector, suitably modified and calibrated for the euro area. Credibly announced and fast fiscal...

Scotland is engaged in a lively and on-going debate on greater fiscal autonomy and independence, which is politically controversial, especially in respect of tax-varying powers. The Scottish Parliament has the power to make a balanced-budget adjustment in public expenditure by varying the basic...

We examine debt-sensitive majority rules. According to such a rule, the higher a planned public debt, the higher the necessary parliamentary majority to approve it. In a two-period model, we compare debt-sensitive majority rules with the simple majority rule when individuals differ regarding...

The main goal of this article is to demonstrate whether the awareness of key actors and the application of the sustainable development concept can find appropriate solutions for the preservation of the environment in the contemporary conditions of economic development. Humanity today is facing...

This paper studies how consumers respond to unexpected, transitory income shocks and why. In a randomized control trial, I elicit marginal propensities to consume (MPC) out of different hypothetical income shock scenarios, varying the payment mode, the shock size, and the source of income. The...

Austerity measures are frequently enacted when the sustainability of public finances is in doubt. Such doubts are reflected in high sovereign yield spreads and put further strain on government finances. Is austerity successful in restoring market confidence, bringing about a reduction in yield...

Fiscal rules have been the centre of economic debate in European Union Member States. They indicate the direction in which policymakers aim to evolve public finances. In recent years the public finances of European Union Member States have been affected by two major changes in economic and...