We show that standard expenditure multipliers capture economy-wide effects of new government projects only when financing constraints are not binding. In actual policy making, however, new projects usually need financing. Under liquidity constraints, new projects are subject to two opposite...

This paper tests for the market environment within which US fiscal policy operates, that is we test for the incompleteness of the US government bond market. We document the stochastic properties of US debt and deficits and then consider the ability of competing optimal tax models to account for...

We analyse the implications of optimal taxation for the stochastic behaviour of debt. We show that when a government pursues an optimal fiscal policy under complete markets, the value of debt has the same or less persistence than other variables in the economy and it declines in response to...

Does additional government spending improve the electoral chances of incumbent political parties? This paper provides the first quasi-experimental evidence on this question. Our research design exploits discontinuities in federal funding to local governments in Brazil around several population...

This paper provides regression discontinuity evidence on long-run and intergenerational education impacts of a temporary increase in federal transfers to local governments in Brazil. Revenues and expenditures of the communities benefiting from extra transfers temporarily increased by about 20%...

This paper uses a regression discontinuity design to estimate the impact of additional unrestricted grant financing on local public spending, public service provision, schooling, literacy, and income at the community (município) level in Brazil. Additional transfers increased local public...

We study how to partition a set of agents in a stable way when each coalition in the partition has to share a unit of a perfectly divisible good, and each agent has symmetric single-peaked preferences on the unit interval of his potential shares. A rule on the set of preference profiles consists...

The division problem under constraints consists of allocating a given amount of an homogeneous and perfectly divisible good among a subset of agents with single-peaked preferences on an exogenously given interval of feasible allotments. We characterize axiomatically the family of extended...

We observe that three salient solutions to matching, division and house allocation problems are not only (partially) strategy-proof, but (partially) group strategy-proof as well, in appropriate domains of definition. That is the case for the Gale-Shapley mechanism, the uniform rule and the top...

We identify in this paper two conditions that characterize the domain of single-peaked preferences on the line in the following sense: a preference profile satisfies these two properties if and only if there exists a linear order L over the set of alternatives such that these preferences are...