Public spending

This is the decrease in the rate of economic growth per capita that results from an increase in the tax revenue to GDP ratio by 10 percentage points. This is…

Executive Summary

The main purpose of this paper is to investigate whether, and to which extent, the rules introduced by central governments effectively restrain the spending behaviour of the decentralized authorities. In this paper, the authors provide an innovative comparative analysis by considering two countries that share the same degree of economic development and many cultural traits – France and Italy. Yet, these two countries differ in one crucial respect. France has a tradition of strong centralization, bureaucratic discipline and detailed technocratic control on the periphery (the regions). By contrast, Italy is known to follow a more flexible approach, which allows for some negotiation between the central and the peripheral authorities and feeds expectations for assistance and bail-outs, should the regions engage in excessive spending and violate the budgetary rules set by the centre.

This is the US debt reduction over the next 10 years claimed in President Obama’s latest budget proposal. After careful examination of this amount it appears nevertheless that the spending…

We all receive from and give to the State. But exactly how much ? An initiative from INESS, a slovakian think tank, helps citizen to quickly get an approximation of…

A widespread understanding of the 2007-2008 crisis places the origins of the crisis in a capture of global economy by the finance industry. The “occupy Wall Street” group would surely agree, as well as most of those who get their economics from the general media. And President Sarkozy in his recent Toulon’s speech did confirm the thesis. If this understanding is correct then it is natural to call for further regulation of the finance industry. But not everyone agrees, and some economists favor another understanding.

is the amount of exposition of French banks to European countries’ private and public debt. They own for instance $106 billion of Italian public debt (which is six times higher…

Until now, the debt crisis seemed to spare the biggest European economy. But the country everybody is relying on starts to meet difficulties to refund its debt. The sale of German benchmark bonds on Wednesday turned to a disaster and the Bundesbank has been forced to hold on to record amounts (39% of the €6 billion Germany had hoped to sell) to ensure the auction did not fail. However, this is not so surprising if one takes a look on German 10-year real bond yield that turns to be negative:

This is the annual cost of one percentage point increase of the interest rates on French government bonds, according to the credit rating agency Moody’s. France is currently facing 2%…

A must-read piece by Alan Meltzer in The Wall Street Journal explains why the economic response to increased government spending is so different from the response predicted by Keynesian models.…

Germany has raised over a quarter of its total EFSF obligation of €211 billion by way of what is essentially magic. The Telegraph reports that “Germany is €55bn richer than…