Why is fiscal policy often procyclical?
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Why is fiscal policy often procyclical?

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Published by National Bureau of Economic Research in Cambridge, Mass .
Written in English

Subjects:

  • Fiscal policy -- Econometric models,
  • Fiscal policy -- Developing countries

Book details:

Edition Notes

StatementAlberto Alesina, Guido Tabellini.
SeriesNBER working paper paper series -- no. 11600., Working paper series (National Bureau of Economic Research) -- working paper no. 11600.
ContributionsTabellini, Guido Enrico, 1956-, National Bureau of Economic Research.
The Physical Object
Pagination27, [18] p. ;
Number of Pages27
ID Numbers
Open LibraryOL17627845M
OCLC/WorldCa61856684

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Abstract: Fiscal policy is procyclical in many developing explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to Cited by: Additional Physical Format: Online version: Alesina, Alberto. Why is fiscal policy often procyclical? Cambridge, Mass.: National Bureau of Economic Research, © Downloadable! Fiscal policy is procyclical in many developing countries. We explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to?starve the Leviathan? to reduce political rents. Voters observe the state of the economy but not the rents appropriated by corrupt governments. When they observe a boom, voters optimally demand more public goods. Downloadable! Many countries, especially developing ones, follow procyclical fiscal polices, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions. We provide an explanation for this suboptimal fiscal policy based upon political distortions and incentives for less-than-benevolent government to appropriate rents.

Get this from a library! Why is fiscal policy often procyclical?. [Alberto Alesina; Guido Enrico Tabellini; National Bureau of Economic Research.] -- "Many countries, especially developing ones, follow procyclical fiscal polices, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions. We provide an. Fiscal policy is procyclical in many countries, and especially in developing ones. We explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to "starve the Leviathan" to reduce political rents. Why is Fiscal Policy Often Procyclical? Alberto Alesina and Guido Tabellini NBER Working Paper No. September JEL No. ABSTRACT Many countries, especially developing ones, follow procyclical fiscal polices, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions. We provide an. a procyclical bias to fiscal policy myopic fiscal policy (an increase in government spending during booms and excessive government borrowing) This situation can lead to an EXCESS of debt accumulation WHYCited by:

Alesina, Campante, and Tabellini Why Is Fiscal Policy Often Procyclical? budget surpluses as a share of GDP should increase. The opposite should occur in recessions.1 In practice, in many developing countries fiscal policy has the opposite prop-erties: it is procyclical. In particular, government spending as . Why Is Fiscal Policy Often Procyclical? Discussion paper no. , Harvard Institute of Economic Research, CESifo Working Paper No. Anderson, B. and Minarik, J. (). Why is fiscal policy often procyclical? ∗ Alberto Alesina and Guido Tabellini Harvard University and IGIER Bocconi First draft: March This version: February Abstract Fiscal policy is procyclical in many countries, and especially in de-veloping ones. We explain this policy failure with a . Why is fiscal policy often procyclical? ∗ Alberto Alesina, Filipe Campante and Guido Tabellini Harvard University, Harvard University and IGIER Bocconi First draft: March This version: June Abstract Fiscal policy is procyclical in many developing countries. We ex-plain this policy failure with a political agency problem. ProcyclicalityCited by: