Why a Stubborn Conservative would Run a Deficit: Policy with Time-Inconsistent Preferences

S-Tier
Journal: Quarterly Journal of Economics
Year: 1989
Volume: 104
Issue: 2
Pages: 325-345

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A conservative government, in favor of a low level of public consumption, knows that it will be replaced by a government in favor of a larger level of public consumption. We show that the resulting level of public consumption is in between the levels the two governments would choose if each were in power both in the present and in the future. In particular, we show that if the conservative government is more stubborn (in a particular sense) than the succeeding government, the conservative government will borrow more than it would had it remained in power in the future.

Technical Details

RePEc Handle
repec:oup:qjecon:v:104:y:1989:i:2:p:325-345.
Journal Field
General
Author Count
2
Added to Database
2026-01-29