Fiscal Constitutions

1 A partial draft of this paper was circulated under the title ‘‘Discretionary Policy and Economic Volatility’’ in October 1995. We thank Robert Becker, Camelia Bejan, Marco Celentani, V. V. Chari, Russell Cooper, John Driffill, David Levine, Rody Manuelli, Albert Marcet, Ken West, and Bill Zame for helpful comments, without implicating them in the results. Earlier versions of the paper were presented at an NBER Group Meeting on Macroeconomic Complementarities (Stanford University), the Texas Monetary Conference (Texas A&M), the Liverpool–Aberystwyth Workshop on Macroeconomics (University of Liverpool), Tel Aviv University, University of Wisconsin, UCLA, USC, University College–London, the European General Equilibrium Meeting (Barcelona), the Federal Reserve Bank of St. Louis, University of Oregon, University of Washington, the Taiwan National Central University, the Third European Conference on Economic Theory (Santiago de Compostela), and the 14th Latin American Meeting of the Econometric Society (Rio de Janeiro). Costas Azariadis