CORDIS Project
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This project develops a new framework for evaluating the sustainability of fiscal policy and debt, focusing on the interplay between economic ability and political willingness to pay. It aims to create models that reflect real-world fiscal decision-making processes.
The purpose of this research project is to develop a new theoretical framework in evaluating the sustainability of fiscal policy and evolution of debt with particular emphasis on recent European experience.
Fiscal or debt sustainability in literature in its most stylized form is defined as satisfying an inter-temporal budget constraint.
Although it serves as a useful benchmark lower bound based on 'ability' to pay, this is a very crude approach due to its disregard of many interesting dynamics e…
MIDDLE EAST TECHNICAL UNIVERSITY
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