Corruption can enhance welfare in two complementary ways in a dynamic time inconsistency model: first, by mitigating the inflation bias of discretionary monetary policy; second, by reducing the loss due to the suboptimal distribution of distortions associated with public debt accumulation. The...

This note explores the link between the effort level to strengthen institutional quality and the nature of the fiscal policy game among interdependent economies plagued by corruption. Every country has a lower incentive to improve public governance when the effort made abroad to remedy...

This note explores the link between the effort level to strengthen institutional quality and the nature of the fiscal policy game among interdependent economies plagued by corruption. Every country has a lower incentive to improve public governance when the effort made abroad to remedy...