This paper assesses the impact of budgetary uncertainty on the optimum instrument for fiscal discipline. In addition to exogenous uncertainty, with respect to both the savings and damages of the public deficit, the model accommodates for externalities as a result of a multitier government...

This paper explores the political economy of fiscal adjustment. It begins with an examination of the evidence for, and sources of, ‘deficit bias', including political and governance factors, public attitudes, the role of financial markets and imprecision about which debt targets should be...

This paper estimates the causal effect of fiscal rules on fiscal balances in a panel of 142 countries over the period 1985-2015. Our instrumental variable strategy exploits the geographical diffusion of fiscal rules across countries. The intuition is that reforms in neighboring countries may...

In the paper, the budgetary relationships between the center and the region are studied in the aspect of income distribution; the analyzes of the shortcomings are implemented being characterized for revenue distribution and preventing socio-economic equalization of territorial units and their...

This paper studies the interplay of fiscal policy and asset price returns of the United States in a time-varying-parameter vector autoregressive model. Using annual data from 1890 to 2013, we study the effects of dynamic shocks to both fiscal policy and asset returns on asset returns and fiscal...

This paper explores the political economy of fiscal adjustment. It begins with an examination of the evidence for, and sources of, ‘deficit bias’, including political and governance factors, public attitudes, the role of financial markets and imprecision about which debt targets should be...

This paper attempts to extend the theoretical and empirical methodology employed in previous literature, by proposing a utility maximization process to estimate the optimal tax revenue from a sample of 30 countries. It is shown that an optimal tax system is defined solely by two crucial...

We conduct a representative survey experiment in Germany to understand why people support inefficient policies. In particular, we measure beliefs about and preferences for rent control - a policy that is widely regarded as harmful by experts. To tease out causal mechanisms, we provide randomly...

We conduct a representative survey experiment in Germany to understand why people support inefficient policies. In particular, we measure beliefs about and preferences for rent control -- a policy that is widely regarded as harmful by experts. To tease out causal mechanisms, we provide randomly...

Epstein (1995) defended the superiority of simple legal rules over complex, human-designed regulations. Has Epstein’s case for simple rules become obsolete with the arrival of artificial intelligence, and in particular machine learning (ML)? Can ML de-liver better algorithmic rules than...