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Fiscal Policy, Public Debt Stabilization and Politics: Theory and Evidence from the US and UK

Lockwood, Ben and Philippopoulos, Apostolis and Snell, Andy (1994) Fiscal Policy, Public Debt Stabilization and Politics: Theory and Evidence from the US and UK. Working Paper. University of Essex, Department of Economics, Economics Discussion Papers, Colchester.

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Abstract

This paper presents a two-party model of fiscal and debt policy which; (i) explicitly models the partisan, stabilisation, and (to some extent) survival motives of politicians; (ii) has predictions that are largely consistent with existing empirical findings about partisan and electoral effects in government expenditure, tax revenue, and debt; (iii) yields new predictions about how the feedback of fiscal policy on lagged debt may depend on partisan and electoral effects. These new predictions are not rejected by a test of the model on US and UK data.

Item Type: Monograph (Working Paper)
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 01 Sep 2014 11:27
Last Modified: 28 Jan 2016 12:30
URI: http://repository.essex.ac.uk/id/eprint/10029

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