Institutionalized Bailouts and Fiscal Policy: Consequences of Soft Budget Constraints
نویسندگان
چکیده
منابع مشابه
EXTERNALITIES AND BAILOUTS∗ Hard and Soft Budget Constraints in Intergovernmental Fiscal Relations
Central government matching grants can, in principle, induce socially-efficient provision of local public goods that produce spillover benefits. Local underprovision of public goods may however elicit direct central-government provision and finance (a “bailout”) that makes local residents better off than under grant-subsidized local provision; local underprovision that induces bailouts reveals ...
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There is much evidence against the so-called ”too big to fail” hypothesis in the case of bailouts to sub-national governments. We look at a model where districts of different size provide local public goods with positive spillovers. Matching grants of a central government can induce socially-efficient provision, but districts can still exploit the intervening central government by inducing dire...
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The persistence of fiscal deficits in many industrial democracies has spawned a vast theoretical literature in political economy on why nations run budget deficits, along with a sharp policy debate concerning fiscal institutions that might reduce these deficits. The debate on fiscal institutions, such as proposed balanced budget amendments for the federal government, involves relatively little ...
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A soft budget constraint arises when a government is unable to commit to not 'bailout' a public hospital if the public hospital exhausts its budget before the end of the budget period. It is shown that if the political costs of a 'bailout' are relatively small, then the public hospital exhausts the welfare-maximising budget before the end of the budget period and a 'bailout' occurs. In anticipa...
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In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier's archiving and manuscript policies are encouraged to visit: JEL classification: E32 E52 E62 E63 Keywords: Optimal simple policy rules Timeless perspective optimal policy Monetary polic...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2010
ISSN: 1556-5068
DOI: 10.2139/ssrn.1515863