The term fiscal sustainability has many definitions, though it almost always refers to the fiscal policies of a government or the public sector. One concept of sustainability relates to solvency, the ability of the government to service its debt obligations in perpetuity without explicit default. Rarely does fiscal sustainability analysis reach the conclusion that a government is insolvent unle...

This paper describes research that integrates Keynesian and Walrasian economics in a new way. The author develops a model in which high unemployment can persist and any unemployment rate can occur as an equilibrium. Equilibrium is selected by the self-fulfilling beliefs of asset market participants. Using this new framework, the author argues that fiscal policy is not the best solution to the p...

This paper characterises the world real interest rate as a common trend in real interest rates in Germany, Japan, and the United States from 1964Q1 to 1996Q2. This single common trend has desirable properties as the world real interest rate and has been moving together with the world real return on the stock market, and the world real fiscal policy variable, suggesting financial integration and...

Proponents of fiscal stimulus argue that government spending is needed to replace the private spending normally lost during a recession. Estimates of the so-called fiscal multiplier based on wartime episodes are used to support the proposition that a peacetime intervention can “stimulate” the economy in a desirable manner. The author argues that a wartime crisis is fundamentally different from ...

To finance basic pro-poor services, the Government of Ghana must mobilize more public revenue. But tax reform has been highly controversial in Ghana. An attempt to introduce VAT in 1995 failed after widespread protests. Although a second attempt to introduce VAT in 1998 succeeded, strong resistance to tax reform remains, and the total tax base remains narrow and over-dependent on petroleum taxe...