model of endogenous fiscal deficits and delayed fiscal reforms
By: Andrés Velasco.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- working paper 6336; Working paper series (National Bureau of Economic Research) -- working paper no. 6336.
Publisher: National Bureau of Economic Research
Published: 1997
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 31
Subjects: Budget deficits.; Fiscal policy.
Description: This paper develops a political-economic model of fiscal policy one in which" government resources are a common property' out of which interest groups can finance" expenditures on their preferred items. This setup has striking macroeconomic implications. " First, fiscal deficits and debt accumulation occur even when there are no reasons for intertemporal smoothing. Second deficits can be eliminated through a fiscal reform, but such a reform may only take place after a" delay during which government debt is built up.
Notes: "December 1997."

JEL no. E6, H3, H4, H6, H7.

Includes bibliographical references (p. 27-31).

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