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The Fallacy of the Fiscal Theory of the Price Level

Buiter, Willem H. - 1999

or unsound argument'. The 'fiscal theory of the price level', recently re-developed by Woodford, Cochrane, Sims and … proponents of the fiscal theory of the price level do not accept the fundamental proposition that the government's intertemporal …. Policy conclusions could be drawn from the fiscal theory of the price level that would be harmful if they influenced the …

Persistent link: https://www.econbiz.de/10012471482

Fiscal Deficits, Exchange Rate Crises and Inflation

van Wijnbergen, Sweder - 1987

The analysis focuses on the government budget constraint and the resolution of inconsistent implications of different policy instruments under that constraint. We show how, under floating exchange rates, external shocks or internal structural reforms may cause jumps in inflation and the exchange...

Persistent link: https://www.econbiz.de/10012476939

The Proper Measurement of Government Budget Deficits : Comprehensive Wealth Accounting or Permanent Income Accounting for the Public Sector

Buiter, Willem H. - 1982

The paper studies budgetary, financial and monetary policy evaluationand design using a comprehensive wealth or permanent income accounting framework. A set of stylized balance sheets and permanent income accountsis constructed for the public, private and overseas sectors.These are then...

Persistent link: https://www.econbiz.de/10012478092

On Public Spending and Economic Unions

Broner, Fernando - 2020

We analyze the conduct of fiscal policy in a financially integrated union in the presence of financial frictions. Frictions create a wedge between the return to investment and the union interest rate. This leads to an over-spending externality. While the social cost of spending is the return to...

Persistent link: https://www.econbiz.de/10012481134

The Macroeconomics of a Pandemic : A Minimalist Model

Céspedes, Luis Felipe - 2020

We build a minimalist model of the macroeconomics of a pandemic, with two essential components. The first is productivity-related: if the virus forces firms to shed labor beyond a certain threshold, productivity suffers. The second component is a credit market imperfection: because lenders...

Persistent link: https://www.econbiz.de/10012481811

Estimating Time Preferences from Convex Budgets

Andreoni, James - 2010

Experimentally elicited discount rates are frequently higher than what one would infer from market interest rates and seem unreasonable for economic decision-making. Such high rates have often been attributed to present bias and hyperbolic discounting. A commonly recognized bias of standard...

Persistent link: https://www.econbiz.de/10012462309

Public versus Private Risk Sharing

Krueger, Dirk - 2009

Can public insurance through redistributive income taxation improve the allocation of risk in an economy in which private risk sharing is limited? The answer depends crucially on the fundamental friction that limits private risk sharing in the first place. If risk sharing is incomplete because...

Persistent link: https://www.econbiz.de/10012463067

Future Rent-Seeking and Current Public Savings

Caballero, Ricardo J. - 2008

The conventional wisdom is that politicians' rent-seeking motives increase public debt and deficits. This is because myopic politicians face political risk and prefer to extract political rents as early as possible. An implication of this argument is that governments will under-save during a...

Persistent link: https://www.econbiz.de/10012464230

Intertemporal Distortions in the Second best

Albanesi, Stefania - 2007

This paper studies the long run properties of intertemporal distortions in a broad class of second best economies. Our unified framework encompasses and extends many well known models, such as variants of the Ramsey taxation model with aggregate or idiosyncratic risk, and economies with...

Persistent link: https://www.econbiz.de/10012465010

Separation of Powers and the Budget Process

Grossman, Gene M. - 2006

We study budget formation in a model featuring separation of powers. In our model, the legislature designs a budget bill that can include a cap on total spending and earmarked allocations to designated public projects. Each project provides random benefits to one of many interest groups. The...

Persistent link: https://www.econbiz.de/10012466333

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