This paper develops a tractable continuous-time model to study the fiscal sustainability of government deficits and the joint dynamics of public debt, with two main ingredients: an endogenous interest …
PublishedClassicQuarterly Journal of EconomicsPublished Nov 2002
This paper by Olivier Blanchard and Roberto Perotti (QJE 2002; circulated from 1998) characterizes the dynamic effects of U.S. government spending and net tax shocks on output using a structural VAR …
PublishedEconometricaOnline 1 Jan 2024Published Sep 2024
The paper asks whether a government can run a deficit today — issuing "stimulus checks" — and allow debt to return to its initial level without any future tax hike or spending cut. In environments …
PublishedReview of Economic StudiesOnline 6 Nov 2025Published Jul 2026
This paper estimates the distributional and social consequences of Department of Defense (DOD) contract spending using a city-level (CBSA) panel dataset spanning 2005–2016. The research question is …
This paper proves that the "interior" Ramsey steady state routinely assumed in heterogeneous-agent optimal-taxation models -- with a modified-golden-rule interest rate and a positive capital tax, as …
This paper builds a business-cycle model merging the standard incomplete-markets model with the New Keynesian model of nominal rigidities to quantify how much automatic fiscal stabilizers (progressive …