Perspectives on the Budget Surplus

Perspectives on the Budget Surplus

This paper provides alternative measures of federal budget surpluses over 10-year and long-term horizons. Official baseline budget forecasts are based on a series of statutory requirements that may be at variance with reasonable expectation. More plausible notions of current policy toward discretionary spending, taxes and retirement trust funds imply that surpluses over the next 10 years will b...

A Public Choice Explanation for the Budget Surplus

Robust Trading Mechanisms with Budget Surplus and Partial Trade

In a bilateral bargaining problem with private values, Hagerty and Rogerson (1987) showed that essentially all dominant strategy incentive compatible, ex post individually rational, and budget balanced mechanisms are posted-price mechanisms, where a price is drawn from a distribution, and trade occurs if both players benefit from trading at this price. We relax budget balancedness to feasibilit...

Individually rational, budget-balanced mechanisms and allocation of surplus

We investigate the issue of implementation via individually rational ex-post budget-balanced Bayesian mechanisms. We show that all decision rules generating a nonnegative expected social surplus are implementable via such mechanisms if and only if the probability distribution of the agents’ type profiles satisfies two conditions: the well-known condition of Crémer and McLean [1988. Full extract...

Strategy-proof assignment with a vanishing budget surplus

A group of n agents must assign p identical desirable objects, where p < n. Cash transfers are used to compensate the losers (who get no object) from the winner’s pocket, and to align incentives and efficiency. Preferences are quasi-linear in money, described by a non negative valuation (willingness to pay) for an object. A Vickrey-Clarke-Groves (VCG) mechanism induces truthful revelation of in...