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来源类型 | Discussion paper |
规范类型 | 论文 |
来源ID | DP14218 |
DP14218 Fiscal Rules and Discretion under Limited Enforcement | |
Marina Halac; Pierre Yared | |
发表日期 | 2019-12-19 |
出版年 | 2019 |
语种 | 英语 |
摘要 | We study a fiscal policy model in which the government is present-biased towards public spending. Society chooses a fiscal rule to trade off the benefit of committing the government to not overspend against the benefit of granting it flexibility to react to privately observed shocks to the value of spending. Unlike prior work, we examine rules under limited enforcement: the government has full policy discretion and can only be incentivized to comply with a rule via the use of penalties which are joint and bounded. We show that optimal incentives must be bang-bang. Moreover, under a distributional condition, the optimal rule is a maximally enforced deficit limit, triggering the largest feasible penalty whenever violated. Violation optimally occurs under high enough shocks if and only if available penalties are weak and such shocks are rare. If the rule is self-enforced in a dynamic setting, penalties take the form of temporary overspending. |
主题 | Macroeconomics and Growth ; Public Economics |
关键词 | Private information Fiscal policy Deficit bias Enforcement constraints |
URL | https://cepr.org/publications/dp14218 |
来源智库 | Centre for Economic Policy Research (United Kingdom) |
资源类型 | 智库出版物 |
条目标识符 | http://119.78.100.153/handle/2XGU8XDN/543105 |
推荐引用方式 GB/T 7714 | Marina Halac,Pierre Yared. DP14218 Fiscal Rules and Discretion under Limited Enforcement. 2019. |
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