We propose a mechanism that eliminates the incentive for risk-averse agents to influence government policy via political contributions. The mechanism requires the government to create a political insurance exchange where agents can insure against the outcome of a government decision and firms...

This paper analyzes the impact of consumer uncertainty on optimal fiscal policy in a model with capital. The consumers lack confidence about the probability model that characterizes the stochastic environment and so apply a max-min operator to their optimization problem. An altruistic fiscal...

This paper compares the fiscal policies implemented by two types of government when confronted by consumer uncertainty. Consumers, lacking confidence in their knowledge of the stochastic environment, endogenously tilt their subjective probability model away from an approximating probability...

This paper analyzes the merits of a novel method of eliminating the power of a gerrymanderer that involves an endogenous weighting system for elected representatives. This endogenous weighting system ties the voting weight of elected representatives in the legislature to the share of the voters...

In this paper, we examine how candidate uncertainty affects the policy platforms chosen in a uni-dimensional, two candidate Downsian spatial model. The candidates, we assume, do not know the true distribution of voters. Following the robust control literature, candidates respond to this...

Standard models of horizontal strategic capital tax competition predict that, in a Nash equilibrium, tax rates are inefficiently low due to externalities - capital infl ow to one state corresponds to capital out ow for another state. Researchers often suggest that the federal government impose...

This paper examines how model uncertainty affects students' choice of major. To account for this uncertainty, the students apply a max-min operator to their optimization problem. We show analytically that greater uncertainty in a particular major causes the student to be less likely to choose...

This paper examines the impact of unemployment on migration. In a theoretical model, we show that unemployment, per se, does not affect migration. Rather, migration only occurs when unemployment shocks force residents to update their expectations of the area's unemployment rate. Once these...

This paper analyzes the impact of consumer uncertainty on optimal fiscal policy in a model with capital. The consumers lack confidence about the probability model that characterizes the stochastic environment and so apply a max-min operator to their optimization problem. An altruistic fiscal...

We exploit differences in the stringency of balanced budget rules across US states to estimate the effect of fiscal policy cyclicality on state GDP growth. While most states have passed laws restricting deficits, the nature and strictness of these laws vary greatly. States with more stringent...