Affordable Access

Fiscal Stabilization Policy and Fiscal Institutions

Authors
Disciplines
  • Economics
  • Political Science

Abstract

In this paper we analyse counter-cyclical fiscal policy within the context of a microfounded analysis of business-cycle stabilization. We show that tax and spending instruments can have a useful counter-cyclical role, even after allowing for the distortionary nature of the instruments and the need for debt sustainability. A critical barrier to the use of fiscal instruments may be political economy concerns, and we survey recent suggestions involving alternative fiscal policy institutions. Copyright 2005, Oxford University Press.

There are no comments yet on this publication. Be the first to share your thoughts.