The answer to this question is "yes". We examine noncooperative and cooperative equilibria under perfect capital mobility. To this end, we develop a two-country optimal growth model with endogenous national fiscal policies. The channel for interdependence is distortionary income taxes.

This paper formalizes the link among electoral uncertainty, fiscal policy and economic growth. The setup is a dynamic general equilibrium model of optimal growth and fiscal policy, in which fiscal policy is endogenized through a game between two political parties that can alternate in power.

This paper presents a two-party dynamic model of optimal fiscal policy which integrates stabilizing electroral and partisan motives.

This paper reviews recent theories that address cooperation and coordination issues in the conduct of fiscal policy in an economic union. This is done by discussing these issues in a complete, logically consistent framework that connects the various problems concerning fiscal policy in an...

We use Greek data during 1960-1994 to test and estimate a model in which wage inflation, price inflation and unemployment depend on the exchange rate regime, the identity of the political party in power and whether an election is expected to take place.

We welfare rank different types of second-best environmental policy. The focus is on the roles of uncertainty and public finance. The setup is the basic stochastic neoclassical growth model augmented with the assumptions that pollution occurs as a by-product of output produced and environmental...

We welfare rank different types of second-best environmental policy. The focus is on the roles of uncertainty and public finance. The setup is the basic stochastic neoclassical growth model augmented with the assumptions that pollution occurs as a by-product of output produced and environmental...