The Political Economy of Fiscal Decisions

Introduction.- The Evolution of Public Debt.- Literature Survey: The Political Economy of the Government Budget: The Tax-Smoothing Theory of the Government Budget; Intergenerational Redistribution; Intragenerational Geographical Redistribution; Government Fragmentation and Duration and the Electoral System; Debt as a Strategic Instrument.- Introduction to the Model: The Model's Time Structure; The Main Novelties of the Model; Further Assumptions of the Model; The Interdependencies of the Model.- The Implivations for Fiscal Policy: A General Example; Fiscal Policy in our Model; The Long Run Utility Function in a General Form and its Derivative with Respect to p; The Optimal Fiscal Policy of an R-Government; The Optimal Policy of an L-Government; Uncertainty.- Conclusions.