This paper presents a two-party model of fiscal and debt policy which; (i) explicitly models the partisan, stabilisation, and (to some extent) survival motives of politicians; (ii) has predictions that are largely consistent with existing empirical finding about partisan and electoral effects in...

This paper continues the study of endogenous fiscal policy, using a framework where both capital taxes and government spending are determined optimally. The paper examines the interaction between private investors and fiscal authorities. It specifies the circumstances under which public debt...