Procyclical Fiscal Policy

Conventional wisdom dictates that a fiscal policy should be counter-cyclical. In particular, by incorporating the political effort behavior of private agents into a weak government model, we explore how income fluctuations affect the optimal budget deficits in a political economy.

Intelepciunea conventionala dicteaza ca o politica fiscala ar trebui sa fie anticiclica. In special, prin incorporarea comportamentului de efort politic al agentilor privati intr-un model guvernamental slab, exploram modul in care fluctuatiile veniturilor afecteaza deficitele bugetare optime intr-o economie politica.