Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Tables and figures 30 Appendices 43 European Central Bank working paper series 48 Terms of use: Documents in EconStor may E U R O P E A N C E N T R A L B A N K WO R K I N G PA P E R S E R I E S E U R O P E A N C E N T R A L B A N K WO R K I N G PA P E R S E R I E S ECB Working Paper No 246 July 20034 Abstract In Lisbon the European Council proclaimed a European growth strategy. It considers an average economic "growth rate of around 3 percent as a realistic prospect for the coming years" and assigns public finances an important role in the process of achieving this goal. This paper addresses the question whether we can find empirical evidence for European countries that public finance reform affects trend growth. Focusing on time series patterns, we investigate whether there have been persistent shifts or trends in economic growth and fiscal variables over the last 40 years. In addition, we estimate a distributed lag model, which 1) indicates that government consumption and transfers negatively affect growth rates of GDP per capita over the business cycle, while public investment has a positive impact, and 2) provides robust evidence that distortionary taxation affects growth in the medium-term through its impact on the accumulation of private physical capital. Non-technical summaryThe European Council set forth the Lisbon Process in order to raise growth rates of output in EU countries. The Council considers "an average economic growth rate of around 3% [as] a realistic prospect for the coming years" 1 . In a follow-up to the process initiated in Lisbon, the Commission and ECOFIN Council underscored that the quality of public finances plays a crucial role for growth and employment. More specifically, they outlined the necessity of lowering the tax burden and particularly the tax wedge for lowskilled workers, making benefit systems more supportive to employment, shifting resources towards productive expenditures in health, education and physical infrastructure, and ensuring the sustainability of public finances.The conclusions of the European Council on the European output performance leave open whether the increase in economic growth is expected to be persistent. Therefore we investigate in this paper which growth pattern could be the outcome of policy reforms in the future course of the Lisbon process. Analysing past experiences in European countries should indicate whether public finances have the potential to raise growth rates more permanently, ...

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In this article, we investigate the existence of infrequent shocks and the degree of persistence of unemployment in the US and Spain over the period 1976-2004. We first apply the minimum Lagrange Multiplier unit root test with up to two endogenous changes in level. The evidence gives support to the hysteresis hypothesis for Spain and to regime-wise stationarity for the US. The computation of median unbiased estimates of half-lives directly from the impulse-response function indicates a much higher degree of persistence of unemployment in Spain than in the US. Our results thus give an indication that aggregate demand policies may have different effects in these two countries.

The distribution of the common law was conditioned by a colonial strategy sensitive to the colonies' level of endowments, exhibiting a more effective implantation of the legal system in initially sparsely populated territories with a temperate climate. This translates into a negative relationship of precolonial population density and settler mortality with legal outcomes for common law countries. By contrast, the implantation of the French civil law was not systematically influenced by initial conditions, which is reflected in the lack of such a relationship for this legal family. The common law does not generally lead to superior legal outcomes to the French civil law when precolonial population density and/or settler mortality are high. The form of colonial rule in British colonies is found to mediate between precolonial endowments and postcolonial legal outcomes.