Politically optimal fiscal policy /

Politically optimal fiscal policy /

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Bibliographic Details
Author / Creator:	Kumhof, Michael, author.
Imprint:	Washington, D.C. : International Monetary Fund, ©2007.
Description:	1 online resource (26 pages) : illustrations
Language:	English
Series:	IMF working paper ; WP/07/68.
Subject:	Fiscal policy -- Econometric models. Taxation -- Econometric models. Debts, Public -- Econometric models. Debts, Public -- Econometric models. Fiscal policy -- Econometric models. Taxation -- Econometric models.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12497834

Hidden Bibliographic Details
Other authors / contributors:	Yakadina, Irina, author. International Monetary Fund. Research Department.
ISBN:	128351625X 9781283516259
Notes:	Includes bibliographical references (pages 24-26). Restrictions unspecified Electronic reproduction. [Place of publication not identified] : HathiTrust Digital Library, 2010. Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 digitized 2010 HathiTrust Digital Library committed to preserve Print version record.
Summary:	Why do governments issue large amounts of debt? In what sense and for whom is such a policy optimal? We show that twisting the optimal taxation paradigm produces very reasonable predictions for debt and real interest rates. Adding an extra dimension of uncertainty about the political planning horizon gives rise to a positive and very plausible government debt-to-GDP ratio of about 55 percent in a model that otherwise predicts negative government debt. We quantify the impact of political uncertainty on steady state and business cycle dynamics. We illustrate how populist tax cuts can cause business cycle fluctuations.
Other form:	Print version: Kumhof, Michael. Politically optimal fiscal policy. Washington, D.C. : International Monetary Fund, ©2007

Description
Summary:	Why do governments issue large amounts of debt? In what sense and for whom is such a policy optimal? We show that twisting the optimal taxation paradigm produces very reasonable predictions for debt and real interest rates. Adding an extra dimension of uncertainty about the political planning horizon gives rise to a positive and very plausible government debt-to-GDP ratio of about 55 percent in a model that otherwise predicts negative government debt. We quantify the impact of political uncertainty on steady state and business cycle dynamics. We illustrate how populist tax cuts can cause business cycle fluctuations.
Physical Description:	1 online resource (26 pages) : illustrations
Format:	Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002.
Bibliography:	Includes bibliographical references (pages 24-26).
ISBN:	128351625X 9781283516259