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We study a business cycle model in which a benevolent fiscal authority must determine the optimal provision of government services, while lacking credibility, lump-sum taxes, and the ability to bond finance deficits. Households and the fiscal authority have risk sensitive preferences. We find...
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This Economic Letter summarizes the papers presented at a conference on "Fiscal and Monetary Policy" held at the Federal Reserve Bank of San Francisco on March 4 and 5, 2005.
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