This paper analyses determinants of household savings in a model based on an extension of the disequilibrium savings theory. These extensions follow from the life-cycle, permanent-income and Ricardian-equivalence theories. Based on panel data of 20 countries from the period 2000-2020, fixed-effect least squares estimation procedures are used. The analysis provides evidence that negative interest rates lead to a statistically and economic significant increase in savings. This implies that stimulating household consumption with a monetary policy of negative interest rates is counter-productive. The positive effect of income uncertainty and lagged saving rates gets smaller for negative interest rates, weakening the support for the disequilibrium-savings theory. Larger government deficits increase savings even more when rates are negative, strengthening the Ricardian equivalence effect. The effect of negative interest on the predictions of the life-cycle and permanent-income theories is mixed.

We consider jurisdictions of different population size that provide local public goods with positive spillovers. Matching grants can induce optimal expenditure levels, but the regions can exploit the rationale behind this system to induce bailouts. We formalize the too-big-to-fail result of Wildasin (1997) by proving that it exists in a subgame-perfect Nash equilibrium, in which the central government’s decisions are taken by regional representatives. Furthermore, our model contains the too-big-to-fail and too-small-to-fail outcomes as special cases, and we are the first to derive the conditions under which each result emerges.

This paper analyses determinants of household savings in a model based on an extension of the disequilibrium savings theory. These extensions follow from the life-cycle and permanent-income theories. Based on panel data for 14 countries spanning the period 2000-2018, fixed-effect least squares and two-stage least squares estimation procedures were used. In line with previous studies, there is strong and robust evidence for the hypotheses of disequilibrium savings theory, specifically, positive effects of unanticipated income changes, unanticipated inflation and the lagged savings rate. There is also robust evidence for the income uncertainty hypothesis that uncertainty has a positive effect on savings. The analysis presents some evidence that social security suppresses savings, but finds no significant effects on the interest rate or old-age dependency ratio. Unexpectedly, the participation rate of the elderly has a significant positive effect in some specifications. These findings contribute to the debate on whether and how governments can influence saving behavior.

De gebrekkige economische integratie en de grote culturele verschillen tussen de lidstaten van de eurozone pleiten tegen substantiële inkomensverzekering op het niveau van de eurozone. Het zou het Belgische model van permanente solidariteit tussen noord en zuid kopiëren naar een hoger niveau.

We develop a theoretical model in which there are public and private firms and a government. When firms become insolvent, the government can intervene with bailouts or nationalizations. The government only intervenes when the bankruptcy of a firm entails social costs. In this setting, we analyze how government interventions affect allocative and productive efficiency. Nationalizations of private firms after unprofitable investments lead to increased allocative efficiency despite private ownership. The effort level chosen by the managers and employees working for a firm is also affected by the possibility of government interventions, reducing the productive efficiency advantage of private firms.

The American Recovery and Reinvestment Act encompassed a substantial federally-funded state-level fiscal stimulus. The objectives of the Act were to increase employment and stimulate economic growth. While the level of the fiscal stimulus was potentially endogenous, a direct analysis of its effects leads to biased results. To circumvent this, the effect of the stimulus on economic growth was studied using instrumental variable estimation, since the distribution of a large part of the funds was based on conditions exogenous to the economic downturn. A cross-state two-stage least squares estimation procedure was used to quantify the effect of the stimulus on economic growth and to show that the robust significant positive effect of the stimulus amounts to a fiscal multiplier of almost 1.6. The results further show that the positive effect of stimulus spending remained significant until the end of the first term of the Obama presidency.

Vooral zuidelijke lidstaten van de Europese Unie zijn hard getroffen door de coronacrisis. De roep om solidariteit wordt hierdoor luider. Solidariteit kan echter verrassend genoeg slecht uitpakken voor de ontvanger.

The government of the Netherlands evoked a State Commission to write an advice on the future viability of the Dutch democracy. In this contribution, we describe the issues and proposals the Commission discusses in its reports, and thus provide insights in the functioning of a modern democracy and on the discussion of improving it. This paper also enables the non-Dutch speaking scientists to provide input to this discussion. 

De Staatscommissie Parlementair Stelsel wil democratie, parlement en rechtsstaat verbeteren. De afkeer tegen méér democratie in de reactie van Jan Schinkelshoek op het rapport van de staatscommissie is echter niet terecht.

We assess a country's influence on decision-making in the Council not merely on the basis of the number of its votes, but based on a novel measure that also takes into account the voting behaviour of other countries. A country that is likely to receive support from other countries will be more influential than a country with more votes, but which tends to be isolated in its policy preferences. We apply the methodology to a novel dataset and use it to assess whether changes in voting weights in the Lisbon Treaty influence the odds of whether countries get what they want when decisions are taken in the Council. We show that large Member States are less successful in getting support from others for their positions, while the changes in voting weights increase large Member States' influence, but statistically significant decrease it only for a subgroup of small Member States.