Logo
Munich Personal RePEc Archive

Rent seeing distortions and fiscal procyclicality

Ilzetzki, Ethan (2006): Rent seeing distortions and fiscal procyclicality.

Warning
There is a more recent version of this item available.
[thumbnail of MPRA_paper_8726.pdf]
Preview
PDF
MPRA_paper_8726.pdf

Download (277kB) | Preview

Abstract

Recent research has demonstrated that while government expenditures are countercyclical in most industrialized countries, they tend to be procyclical in developing countries. We develop a dynamic political-economy model to explain this phenomenon. Simulations of the model allow us to quantitatively compare the relative role of common explanations for fiscal procyclicality. We conclude that rent seeking within the fiscal process can explain fiscal procyclicality better than other common explanations, such as borrowing constraints and macroeconomic volatility.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.