This paper presents a dynamic political economy theory of public spending, taxation and debt. Policy choices are made by a legislature consisting of representatives elected by geographically-defined districts. The legislature can raise revenues via a distortionary income tax and by borrowing....

This paper analyzes the effects of imposing constitutional fiscal restraints in a dynamic political economy model of fiscal policy. Policy choices in each period are made by a legislature consisting of representatives elected by geographically-defined districts. The legislature uses...