FISCAL STATE POLICY FOR SUSTAINABLE DEVELOPMENT

U.S. State Fiscal Policy and Natural Resources

Sustainable Fiscal Policy in a Small Open Economy

We study a small open economy characterized by two main frictions – incomplete financial markets and an inability of the government to commit to policy. We characterize the best sustainable fiscal policy and show that it can prolong shocks to output. In particular, the government’s credibility not to expropriate capital endogenously varies with the state of the economy and may be “scarcest” dur...

Efficient Expropriation: Sustainable Fiscal Policy in a Small Open Economy

We study a small open economy characterized by two empirically important frictions – incomplete financial markets and an inability of the government to commit to policy. We characterize the best sustainable fiscal policy and show that it can amplify and prolong shocks to output. In particular, even when the government is completely benevolent, the government’s credibility not to expropriate cap...

Efficient expropriation: Sustainable fiscal policy in a small open economy

Whether State Fiscal Policy Affects State Economic Growth

Theory predicts that fiscal policy can affect economic growth by adjusting incentives for investment and labor as well as by distorting after-tax returns across sectors. This paper examines the effect of fiscal policy on growth rates first graphically, and then through two models, one of which disaggregates fiscal policy variables. I find evidence that increased size of government is negatively...