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Implementation of fiscal consolidation by advanced economies in coming years needs to take into account the short and long-run interactions between economic growth and fiscal policy. Many countries must reduce high public debt to GDP ratios that penalize longterm growth. However, fiscal adjustment is likely to hurt growth in the short run, delaying improvements in fiscal indicators, including deficits, debt, and financing costs. Revenue and expenditure policies are also critical in affecting productivity and employment growth. This paper discusses the complex relationships between fiscal policy and growth both in the short and in the long run.

Business & Economics --- Economic Theory --- Economic development --- Fiscal policy --- Debts, Public --- Debts, Government --- Government debts --- National debts --- Public debt --- Public debts --- Sovereign debt --- Tax policy --- Taxation --- Development, Economic --- Economic growth --- Growth, Economic --- Government policy --- Debt --- Bonds --- Deficit financing --- Economic policy --- Finance, Public --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- Macroeconomics --- Public Finance --- Interest Rates: Determination, Term Structure, and Effects --- Fiscal Policy --- Fiscal Policies and Behavior of Economic Agents: General --- Economic Growth and Aggregate Productivity: General --- Debt Management --- Sovereign Debt --- Public finance & taxation --- Fiscal consolidation --- Fiscal stance --- Fiscal multipliers --- Italy

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This paper analyzes the impact of decentralization on overall fiscal performance in the European Union, taking into account fiscal institutional arrangements. We find that spending decentralization has been associated with sizably better fiscal performance, especially when transfer dependency of subnational governments is low. However, subnational fiscal rules do not seem to be associated with better performance.

Decentralization in government --- Fiscal policy --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Centralization in government --- Devolution in government --- Government centralization --- Government decentralization --- Government devolution --- Political science --- Central-local government relations --- Federal government --- Local government --- Public administration --- Econometric models. --- Government policy --- Budgeting --- Macroeconomics --- Public Finance --- State and Local Taxation, Subsidies, and Revenue --- Intergovernmental Relations --- Federalism --- Secession --- Fiscal Policies and Behavior of Economic Agents: General --- Fiscal Policy --- National Budget --- Budget Systems --- National Government Expenditures and Related Policies: General --- Budgeting & financial management --- Public finance & taxation --- Fiscal rules --- Fiscal federalism --- Fiscal stance --- General government spending --- Expenditure --- Public financial management (PFM) --- Budget --- Expenditures, Public --- Denmark

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News - or foresight - about future economic fundamentals can create rational expectations equilibria with non-fundamental representations that pose substantial challenges to econometric efforts to recover the structural shocks to which economic agents react. Using tax policies as a leading example of foresight, simple theory makes transparent the economic behavior and information structures that generate non-fundamental equilibria. Econometric analyses that fail to model foresight will obtain biased estimates of output multipliers for taxes; biases are quantitatively important when two canonical theoretical models are taken as data generating processes. Both the nature of equilibria and the inferences about the effects of anticipated tax changes hinge critically on hypothesized information flows. Different methods for extracting or hypothesizing the information flows are discussed and shown to be alternative techniques for resolving a non-uniqueness problem endemic to moving average representations.

Taxation. --- Fiscal policy. --- Information theory in economics. --- Economic cybernetics --- Econometrics --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Duties --- Fee system (Taxation) --- Tax reform --- Taxation, Incidence of --- Taxes --- Revenue --- Government policy --- Investments: Bonds --- Public Finance --- Fiscal Policy --- Fiscal Policies and Behavior of Economic Agents: General --- General Financial Markets: General (includes Measurement and Data) --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- National Government Expenditures and Related Policies: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Tax Law --- Investment & securities --- Econometrics & economic statistics --- Public finance & taxation --- Welfare & benefit systems --- Macroeconomics --- Taxation & duties law --- Municipal bonds --- Vector autoregression --- Expenditure --- Labor taxes --- Fiscal policy --- Financial institutions --- Econometric analysis --- Tax law --- Bonds --- Expenditures, Public --- Income tax --- Law and legislation --- United States