Using the standard real business cycle model with lump-sum taxes, we analyze the impact of fiscal policy when agents form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government purchases are significantly higher under learning, and fall within empirical bounds reported in the literature (in sharp contrast to the implausibly low values ...

In this paper we use the common perspective provided by the neoclassical growth model to evaluate the size of the distortions associated with different monetary and fiscal policies designed to finance a given sequence of government expenditures. We calibrate a neoclassical monetary economy to match important features of the U.S. economy and use it to provide a quantitative assessment of the wel...

This paper incorporates the aging population projected by the U.S. Social Security Administration to a heterogeneous-agent OLG model with idiosyncratic wage shocks and analyzes its effects on individual households, the government budget, and the overall economy. The fiscal gap caused by the demographic change is 2.94% of GDP under the intermediate projection. The effect of the aging population ...

This case study of fiscal sustainability in Turkey after the crisis in 2001 reviews and extends quantitative approaches to fiscal sustainability analysis and brings them together in a user-friendly tool applicable in a data-sparse environment. It combines a dynamic simulations approach with a steady-state consistency approach. It also incorporates user-defined stress tests and stochastic simula...

The issue of whether government capital is productive has received a great deal of attention recently, yet empirical analyses of public capital productivity have generally been limited to the official capital stock estimates available in a small sample of countries. Alternatively, many researchers have investigated the output effects of public investment—recognizing that investment may be a poo...

Using the standard real business cycle model with lump-sum taxes, we analyze the impact of fiscal policy when agents form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government purchases are significantly higher under learning, and fall within empirical bounds reported in the literature (in sharp contrast to the implausibly low values ...

This paper extends the recent empirical literature on the relationship between local decentralization and growth using data from both metropolitan and non-metropolitan regions in the U.S. The analysis utilizes both metropolitan and non-metropolitan regions, and thus avoids the possible selection bias present in previous research. The results for non-metropolitan regions indicate a relatively we...

This paper investigates the effects of fiscal policy on the trade balance using a structural factor model. A fiscal policy shock worsens the trade balance and produces an appreciation of the domestic currency but the effects are quantitatively small. The findings match the theoretical predictions of the standard Mundell-Fleming model, although fiscal policy should not be considered one of the m...

This research analyses through the use of instrumental variables estimation whether democracy has an effect on variables belonging to three different categories: fiscal policy, inequality in income distribution and political instability. It shows there is no stable relation between democracy and fiscal policy variables between countries of the sample in the 1978-1988 period. Democracy, on the o...

The authors report a case of asymptomatic leukemic optic neuropathy as the first sign of acute lymphoblastic leukemia relapse in a 4-year-old boy. Routine ophthalmologic examination showed normal visual acuity and pupillary function in the presence of a tumoral mass covering the left optic disc. The mass resolved with preservation of vision after intrathecal chemotherapy. A routine ophthalmolog...