Barseghyan, Levon; Battaglini, Marco; Coate, Stephen - In: Journal of Economic Theory 148 (2013) 6, pp. 2223-2265
This paper explores the implications of the political economy model of Battaglini and Coate (2008) [8] for the behavior of fiscal policy over the business cycle. The model predicts that fiscal policy is counter-cyclical with debt increasing in recessions and decreasing in booms. Public spending...
