Fiscal sustainability refers to a government's capacity to generate sufficient revenue to cover its expenses and repay its debts without accumulating excessive liabilities or creating new money. Recent observations indicate that Kenya's economic growth has slowed, prompting concerns about its...

We provide experimental evidence on how fiscal news shapes households' expectations and spending behavior. Using a new survey of ~11,000 Korean individuals linked to automatically collected high-frequency spending data, we elicit respondents' fiscal and macroeconomic beliefs and randomly provide...

New Zealand's population is ageing. Public spending on public pensions (NZ Superannuation) and health are particularly sensitive to this trend and are expected to increase accordingly. Current and future government policies aimed at addressing this challenge will not only influence macroeconomic...

This paper examines, through a modified aggregate demand curve, the reduction in equilibrium income caused by the presence of precautionary demand in the money demand function. Specifically, this paper rigorously analyses the transformation of the well-known fiscal and monetary policy...

This paper investigates how external shocks propagate through fiscal transmission mechanisms in a commodity-dependent economy within a dynamic macroeconomic framework. The study contributes to the literature on macroeconomic fluctuations by examining the interaction between external revenue...

This study examines the determinants of inflation volatility in Tunisia, focusing on central bank independence (CBI), economic transparency, and macroeconomic fundamentals. Although CBI is widely regarded as essential for monetary credibility, its effectiveness depends on its institutional...

The interplay between fiscal and monetary policy is critical for small open economies exposed to global volatility, yet the regime-dependent nature of this transmission often remains underexplored. This study investigates whether the Hungarian economy operated under fiscal or monetary dominance...

I develop a model-based definition of time-varying sovereign bond safety, and apply it empirically by constructing a news-based index, the FLY, that measures global safe-assets demand. The FLY captures flight-to-safety episodes, the savings glut, and natural interest rate declines. Estimated FLY...

This Note describes methods for estimating potential fiscal savings across five spending categories—the wage bill, pension payments, capital spending, purchases of goods and services, and social protection spending. The primary methodology compares a country’s spending levels to specific...

Ambitious and credible fiscal consolidation measures are needed to restore debt sustainability and create fiscal space to meet growing social needs. As the population continues to grow rapidly, the demand for teachers and health professionals intensifies. Keeping pace with these growing needs...

The worldwide move toward renewable energy indicates a fundamental change that is particularly important in the MENA region, which has abundant renewable resources and has depended on hydrocarbon economies. This study presents an empirical examination of key macroeconomic determinants-inflation,...

This study examines public debt sustainability in the Eurozone by estimating fiscal reaction functions that assess how fiscal balances respond to rising public debt under heterogeneous macroeconomic conditions. Using annual panel data for 20 EU countries from 2000 to 2024, we employ fixed...

Thailand's 2024 excise tax reform aimed to stimulate the tourism economy through the elimination of import tariffs and the reduction in excise rates on wine. This study evaluates the causal economic and distributional impacts of this policy intervention. The analysis employs a quasi-experimental...

In Morocco, the increasing public expenditure on essential sectors, such as education, does not always lead to improved outcomes, highlighting a significant gap between resource allocation and quality enhancement. This study examines the efficiency of public expenditure in education, health, and...

Institutions play a central role in shaping entrepreneurial behavior, yet much of the existing literature, even with the foundational insights of institutional economists such as Veblen, Mitchell, Commons, Coase, Ostrom, Williamson, and North, continues to view institutions as monolithic...

Background: This study revisits whether oil revenue windfalls translate into higher socio-economic welfare in oil-exporting economies and explains why oil price booms often fail to generate sustained gains in real GDP per capita. Methods: Using annual data for ten oil-exporting countries over...

This study examines the impact of key governance dimensions on public budget rationalization in Palestine from 2002 to 2023. Utilizing Legitimacy Theory, the research assesses how institutional quality affects fiscal outcomes, including revenues, expenditures, net lending, and budget balance....

This study investigates the structural relationship between inflation and key macroeconomic fundamentals in Türkiye, an emerging economy characterized by persistently high and divergent inflation dynamics. Using monthly data for the 2011-2024 period, we apply the Kapetanios, Shin, and Snell...

Japanís prolonged ZLB period alongside substantial debt accumulation makes it a compelling laboratory for testing whether fiscal multipliers differ across normal and ZLB periods. This paper investigates this question using a sign- and zero-restricted TVP-VAR that jointly identifies fiscal rules...

Öffentliche Investitionen und ihre Finanzierung stehen seit Jahren im Mittelpunkt wirtschaftspolitischer Debatten in Deutschland. Anhand einer aktuellen Online-Umfrage wird in diesem Policy Brief gezeigt, dass sich die große Mehrheit der Bevölkerung mehr Investitionen in allen zentralen...

This paper analyses how UK tax-benefit policies shaped poverty, inequality, and living standards between 2019 and 2023, spanning the COVID-19 shock and the subsequent cost-of-living crisis. Using the UKMOD tax-benefit microsimulation model combined with imputed household consumption data, we...

The purpose of this note is to help mainstream fiscal multipliers in PFRs. It aims to provide guidance for estimating fiscal multipliers in developing countries by leveraging the World Bank’s macroeconomic and fiscal model (MFMod) to generate country-specific estimates. While other methods are...

The Public Finance Review (PFR) for Bosnia and Herzegovina (BiH) aims to support policymakers in strengthening medium-term fiscal frameworks and aligning fiscal policy with sustainable and inclusive growth. Against the backdrop of BiH’s highly decentralized governance structure, heightened...

This Public Finance Review (PFR)—the first such assessment by the World Bank for South Sudan— aims to evaluate the state of the nation’s public finances and provide actionable recommendations to create fiscal space for public investment and service delivery while strengthening fiscal...

Commodity-exporting economies, such as South Africa, are susceptible to wide fluctuations in their business cycles, closely tied to commodity price fluctuations. In this research, we develop a prototype dynamic stochastic general equilibrium (DSGE) model with specific features for emerging small...

Zambia, an economy heavily reliant on hydropower for electricity, has faced sustained disruptions to electricity generation amid increasingly frequent and severe droughts. These drought-related disruptions have caused large GDP losses in recent years and have tilted electricity generation...

South Africa has a relatively well-developed social protection system for a middle-income country. Despite its roots in the country's racially discriminatory past, the system has been repurposed post-apartheid to address deep poverty and severe inequality. This paper explores key characteristics...

This paper assesses the fiscal and distributional effects of personal income tax expenditures in Portugal using EUROMOD and 2022 EU-SILC microdata. We compare the 2023 tax-benefit system with a counterfactual scenario in which tax expenditures are removed to estimate first-round impacts. We find...

This paper critically reviews the empirical and structural literature on the effects of income taxation on informal economic activity. Although labor taxation has been widely studied in relation to labor market outcomes, evidence linking income taxes to informality remains fragmented and uneven...

We analyze the sources of the pandemic-era inflation surge in the euro area using a Bayesian vector autoregression (BVAR) model. By applying narrative, sign, zero, and inequality restrictions, this study is the first that jointly analyzes the inflationary effects of energy and non-energy supply...

Using cross-country data for 167 countries with broad post-World War II coverage and historical extensions to earlier periods, we quantify how deficits, taxes, and civilian spending respond to increases and decreases in military spending. On average, deficit financing dominates: a 1 percent-age...