This paper presents a dynamic political economy theory of public spending, taxation and debt. Policy choices are made by a legislature consisting of representatives elected by geographically-defined districts. The legislature can raise revenues via a distortionary income tax and by borrowing....

While equilibrium allocations in models with incomplete markets are generally not Pareto-efficient, it is often argued that quantitative welfare losses from missing assets are small when time-horizons are long and shocks are transitory. In this paper we use a computational analyses to show that...

Using techniques from evolutionary game theory, we analyze potential games with continuous player sets, a class of games which includes a general model of network congestion as a special case. We concisely characterize both the complete set of Nash equilibria and the set of equilibria which are...

Why do governments seek restrictions on the use of export subsidies through reciprocal trade agreements such as GATT? With existing arguments, it is possible to understand GATT's restrictions on export subsidies as representing an inefficient victory of the interests of exporting governments...