Fiscal stance may respond pro-cyclically to the business cycle... This chapter describes the extent to which fiscal policy has been a stabilising or destabilising influence on economic activity in the OECD area over the last two decades, and investigates some of the institutional factors which may have led to the observed outcome. The concerns motivating the chapter relate to the fact that disc...

Recent research in both the social and natural sciences has been devoted to increasing our ability to predict disasters, prepare for them and mitigate their costs. Curiously, we appear to know very little about the fiscal consequences of disasters. The likely fiscal impact of a natural disaster has not been examined before in any comparable or comparative framework. We estimate and quantify the...

This paper explores the political economy of fiscal policy in the German Länder, testing several theories from the cross-national literature on budget deficits along with some additional hypotheses relating to the incentives created by the German federal system. The results suggest that governments controlled by the left spend and borrow more in the long run than right-wing governments, though ...

Recent! research! in!both! the! social! and!natural! sciences!has!been!devoted! to! increasing!our! ability!to!predict!disasters,!prepare!for!them!and!mitigate!their!costs.!Curiously,!we!appear!to! know!very!little!about!the!fiscal!consequences!of!disasters.!The!likely!fiscal!impact!of!a!natural! disaster! has! not! been! examined! before! in! any! comparable! or! comparative! framework.! We! e...

We analyze, both theoretically and empirically, the influence of direct democratic institutions on the size and development of shadow economies. Our model suggests that, as the extent of direct democracy increases, implemented fiscal policies more nearly reflect the preferences of citizens and so reduce their incentives to operate in the informal sector. This theory implies a negative relations...

THE NOTION OF TRANSPARENCY is broad-ranging. It encompasses notions of accountability and political legitimacy of decision makers, as well as the legal and accounting infrastructure in which economic decisions are made. But from the operational perspective of a central bank, transparency can be regarded more narrowly in terms of the disclosure of information to a wider audience. Intuitively, th...

The interaction of monetary and fiscal policies is a crucial issue in a highly integrated economic area as the EU. In this paper we study policy cooperation. In particular, we focus on how coalitions among policy-makers are formed and what are their effects on the stabilization of output and price.

The use of dynamic revenue forecasting to evaluate proposed tax law changes varies at the federal and state level. Congressional agencies take some behavioral effects into account, but they stop short of producing dynamic revenue estimates that may result from changes in fiscal policies. At the state level, 10 to 25 agencies use dynamic forecasting models in some circumstances. In general, the ...