TY  - JOUR
AU  - Velasco, Andres
TI  - A Model of Endogenous Fiscal Deficits and Delayed Fiscal Reforms
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6336
PY  - 1997
Y2  - December 1997
DO  - 10.3386/w6336
UR  - http://www.nber.org/papers/w6336
L1  - http://www.nber.org/papers/w6336.pdf
N1  - Author contact info:
Andrés Velasco
School of Public Policy 
London School of Economics and 
Political Science 
Houghton Street 
London WC2A 2AE 
United Kingdom
Tel: +4420 7955 7982
E-Mail: A.Velasco1@lse.ac.uk
M1  - published as Andres Velasco. "A Model of Endogenous Fiscal Deficits and Delayed Fiscal Reforms," in James M. Poterba and Jürgen von Hagen, editors, "Fiscal Institutions and Fiscal Performance" University of Chicago Press (1999)

AB  - This paper develops a political-economic model of fiscal policy one in which" government resources are a  common property' out of which interest groups can finance" expenditures on their preferred items.  This setup has striking macroeconomic implications. " First, fiscal deficits and debt accumulation occur even when there are no reasons for intertemporal smoothing.  Second deficits can be eliminated through a fiscal reform, but such a reform may only take place after a" delay during which government debt is built up.
ER  -