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The Political Economy of Fiscal Policy

Author

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  • Marco Battaglini
  • Stephen Coate

Abstract

We describe a theory of the collective choice of fiscal policy in dynamic economies that are subject to aggregate shocks. The theory incorporates realistically complex policy spaces, rational forward-looking agents, and a rich political decision process. We argue that it provides a tractable framework to study a variety of important questions in macroeconomics and public finance. (JEL: E62, H63, D79) (c) 2008 by the European Economic Association.

Suggested Citation

  • Marco Battaglini & Stephen Coate, 2008. "The Political Economy of Fiscal Policy," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 367-380, 04-05.
  • Handle: RePEc:tpr:jeurec:v:6:y:2008:i:2-3:p:367-380
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    Cited by:

    1. G. C. Lim & Paul D. McNelis, 2008. "Cyclical Government Spending, Income Inequality and Welfare in Small Open Economies," Melbourne Institute Working Paper Series wp2008n18, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • D79 - Microeconomics - - Analysis of Collective Decision-Making - - - Other

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