sub-standard economic performance. They are: long-term trends in world commodity prices, volatility, crowding out of …

We develop a model of the political consequences of public income volatility. As is standard, political incentives … create inefficient policies, but we show that making income uncertain creates specific new effects. Future volatility reduces … policy less costly. We show how this model can help think about the connection between volatility and economic growth and in …

their precautionary savings. This depresses interest rates, especially in the short run, and generates an output drop, even …