Standard majority-voting models predict that redistribution is positively linked to the mean-to-median income ratio but empirical evidence is mixed. This paper shows that the different empirical reactions to rising mean-to-median income ratios can be rationalized in a simple...

Preventive policy measures such as bailouts often pass parliament very narrowly. We present a model of asymmetric information between politicians and voters which rationalizes this narrow parliamentary outcome. A successful preventive policy impedes the verification of its own necessity. When...

Does the fiscal multiplier depend on the exchange rate regime and, if so, how strongly? To address this question, we first estimate a panel vector autoregression (VAR) model on time-series data for OECD countries. We identify the effects of unanticipated government spending shocks in countries...

Does the fiscal multiplier depend on the exchange rate regime? To address this question, we first estimate a panel vector autoregression (VAR) model on time-series data for OECD countries. We identify the effects of unanticipated government spending shocks in countries with fixed and floating...

We provide evidence on life-cycle and business-cycle fluctuations in the dispersion of household-level wage innovations, comparing the US, the UK, and Germany. First, we find that household characteristics explain about 25% of the dispersion in wages within an age group in all three countries....