Fiscal and Monetary Policies after the Crises

Abstract

We review the recent literature on macroeconomic stabilization policy, with a particular focus on two major challenges that are particular to the post-crisis landscape. These are, first, how to provide meaningful economic stimulus when the zero lower bound on nominal interest rates is binding. Second, how to design a stabilization policy for the Eurozone that will remedy the large macroeconomic imbalances among member states.

Existence, Multiplicity and Dynamic Complexity in an OLG Model with Fiscal Policy and Debt

“…In the recent macroeconomic literature numerous efforts have been proposed with the aim to provide theoretical frameworks of fiscal policy rules for debt sustainability allowing for the presence of debt bubbles. The significant attention on the sustainability of fiscal policies should be ascribed to continuous adaptations, especially in Europe, of debt control policies and, also, to the unexpected circumstance according to which similar fiscal measures implemented in similar countries have produced different economic outcomes (see to this purpose [5]). Within this research stream, the interesting contribution by [7] is placed, where the author formulates a suitable model to tackle the problem concerning debt sustainability and debt bubbles.…”