Why is fiscal policy often procyclical?
Why is fiscal policy often procyclical?
6 min read
Rate this book:
About This Book
"Many countries, especially developing ones, follow procyclical fiscal polices, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions. We provide an explanation for this suboptimal fiscal policy based upon political distortions and incentives for less-than-benevolent government to appropriate rents. Voters have incentives similar to the "starving the Leviathan" classic argument, and demand more public goods or fewer taxes to prevent governments from appropriating rents when the economy is doing well. We test this argument against more traditional explanations based purely on borrowing constraints, with a reasonable amount of success"--National Bureau of Economic Research web site.
Buy This Book
As an Amazon Associate and Bookshop.org affiliate, BookOrb earns from qualifying purchases.
Write a Review
Sign in to write a review.
More by Alberto Alesina
A model of the political econo
A model of the political economy of the United States
A test of racial bias in capit
A test of racial bias in capital sentencing
Ambiguity and extremism in ele
Ambiguity and extremism in elections
Artificial states
Artificial states
Austerity and Elections
Austerity and Elections
Budget Deficits and Budget Ins
Budget Deficits and Budget Institutions