This paper examines the role of fiscal policy, trade and energy taxes on environmental quality in Europe using disaggregated data at the monitoring station level for the 12 richest European countries spanning the period from 1995 to 2008. Our estimations show that fiscal policies and energy taxes are important determinants of pollution through various mechanisms. We find that increasing the sha...

We develop a dynamic, stochastic, computable general equilibrium model of political approval management and fiscal policy in order to analyze how political approval management affects United States’ Presidential and United Kingdom’s parliamentary business cycles. We find that governments in both systems respond to declining political approval by pursuing suboptimal fiscal policies that stimulat...

We use a dynamic factor model to provide a semi-structural representation for 101 quarterly US macroeconomic series. We find that (i) the US economy is well described by a number of structural shocks between two and six. Focusing on the four-shock specification, we identify, using sign restrictions, two non-policy shocks, demand and supply, and two policy shocks, monetary and fiscal. We obtain ...

We assess empirical evidence and theoretical work on the determinants of the fiscal multiplier. Recent empirical literature suggests that short-run spending multipliers are larger under fixed exchange rate regimes, in economic downturns and during financial crises. However, the evidence on their magnitude under fiscal stress is mixed. Using a stylised model of a small open economy, we carry out...

The worldwide growth slowdown after 1975 was a major negative fiscal shock; lower growth lowers the present value of tax revenues and primary surpluses and thus makes a given level of debt more burdensome. Most countries failed to adjust to the negative fiscal consequences of the growth implosion and so public debt to GDP ratios exploded. The growth slowdown therefore played an important role i...