Fiscal policy, government debt and private consumption

Member states of the European Economic and Monetary Union gave up monetary and exchange rate policy. Fiscal policy is the only stabilization instrument left. This doctoral thesis studies the determinants of the effectiveness of fiscal policy. Can it affect output? What are the relevant channels? Particular attention goes to the influence of fiscal policy on private consumption spending. In four theoretical and empirical (macroeconometric) contributions, we show that this influence depends to a large extent on the level of public debt.