THE POLITICAL COLOR OF FISCAL RESPONSIBILITY

• 成果类型: Article
• 署名作者: Muller, Andreas; Storesletten, Kjetil; Zilibotti, Fabrizio
• 署名单位: University of Oslo; University of Zurich
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1111/jeea.12154
• 发表日期: 2016
• 页码: 252-302
• 关键词: dynamic theory; GOVERNMENT; deficits; debt; INVESTMENT; ECONOMY; POLICY; size; RISK

摘要

We propose a dynamic general equilibrium model that yields testable implications about the fiscal policy run by governments of different political color. Successive generations of voters choose taxation, expenditure, and government debt through repeated elections. Voters are heterogeneous by age and by the intensity of their preferences for public good provision. The political equilibrium switches stochastically between left- (pro-public goods) and right-leaning (pro-private consumption) governments. A shift to the left (right) is associated with a fall (increase) in government debt, an increase (fall) in taxation, and an increase (fall) in government expenditures. However, left-leaning governments engage in more debt accumulation during recessions. These predictions are shown to be consistent with the time-series evidence for the United States in the postwar period, and also with the evidence for a panel of OECD countries. (JEL: D72, E62, H41, H62, H63)