We build a dynamic general equilibrium model with heterogeneous households, namely Rich and Poor, and capitalskill complementarity structure in the production function, to study aggregate and distributional implications of fiscal consolidation policies when the government uses a rich set of spending and tax instruments. Fiscal policy is conducted through constrained optimized fiscal rules. Our results show that, in the long run, fiscal consolidation enhances both aggregate efficiency and equity; however, it may hurt Rich households depending on which fiscal instrument takes advantage of the fiscal space created. Along the transition, wage inequality significantly increases due to the capital skill complementarity structure of the production function. Specifically, this happens because debt consolidation crowds in capital and this favours Rich (skilled) households. On the other hand, the reduction in interest rates and government bonds lead to a decrease in Rich households income coming from capital and government bonds which eventually decrease income inequality. Finally, a rather novel finding is that the combination of asset and skill heterogeneity amplifies the increase in wage inequality in the early phase of fiscal consolidation.
This paper discusses the issue of regional convergence in Greece during the period 1995–2005. Following the theoretical concept of Barro and Salla-i-Martin, 1990 (β- and σ-convergence concepts), several tests are conducted to test for conditional or unconditional convergence across Greek regions including GMM estimation of Barro regressions. The results indicate absence of convergence across NUTS II regions while there is evidence of convergence at prefectural level (NUTS III). The effect of agriculture industry and services sector is examined and services are found to have significant impact on growth and convergence. Finally, we examine the effect of the implementation of the European funding programs in some detail.
We study the implications of changes in the mix of taxes, public spending, and public finance in the Eurozone. In so doing, we build a general equilibrium OLG model that naturally incorporates all the main categories of public spending and taxes. We focus on the medium- and long-run implications of permanent reforms in the actual policy mix. When we depart from 2008, the best way out of the recession would be an increase in public spending on education and health and in turn cuts in distorting taxes including social security contributions. When we depart from the year 2017, which features a higher inherited public debt, public debt consolidation becomes the superior reform to the extent that the focus is on the medium and long run.
Earthquakes, large or even moderate, are often followed by secondary phenomena, such as landslides, tsunamis, fires and technological disasters, leading to cascading effects that may, in turn, cause severe repercussions. Before, during and after the occurrence of these events, risk communication, currently evolved to codified legislation, is a crucial factor. Policy selection in the present study is approached by the application of the risk game tree and its formation. The events studied here in view of policy making have occurred both in the historical and the instrumental era, to account for different level of exposure and anthropogenic hazards, in Greece (1894 Atlanti, 1953 Kefallinia series, 2003 and 2015 Lefkas), Italy (1976 Friuli), Japan (2011 Tōhoku) and Slovenia (1917 Brežice). In all case studies the whole disaster management cycle is examined, i.e. mitigation, preparedness, response and recovery. Disaggregation of earthquake-related direct and cascading effects, as well as risk communication are taken into account and ethical challenges are posed both to scientists and policy makers.
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