Rules with Discretion and Local Information
نویسندگان
چکیده
منابع مشابه
Rules With Discretion and Local Information
To ensure that individual actors take certain actions, community enforcement may be required. This can present a rules-versus-discretion dilemma: It can become impossible to employ discretion based on information that is not widely held, because the wider community is unable to verify how the information was used. Instead, actions may need to conform to simple and widely verifiable rules. We st...
متن کاملDiscretion, Rules, and Volatility
E conomic models with multiple equilib-ria, such as Diamond and Dybvig (1983), have become increasingly useful in analyzing volatility in financial markets and in business cycles. In many of these models, indeterminacy is a result of incomplete financial markets or technological nonconvexities. Here we identify economic policy discretion to be another distinct cause of indeterminate equilibrium...
متن کاملCommentary on "Discretion, Rules and Volatility
D iscussions of rules vs. discretion have occupied a central place in the analysis of macroeconomic policies in dynamic models. Costas Azariadis and Vincenzo Galasso have presented a new model that shows how a discretionary policy regime can lead to a more volatile fiscal policy than one pursued under a constitutional rule. They set up a simple fiscal policy story and examine the potential for ...
متن کاملCommentary on "Discretion, Rules and Volatility
C ostas Azariadis and Vincenzo Galasso address a basic but very important question about the social security system. What are the incentives for young workers to contribute funds and thus maintain such a system? The issue is to understand the economic and political forces that combine to provide the foundations for a social security system. The starting point of the analysis is perhaps one of t...
متن کاملFiscal Rules and Discretion under Self-Enforcement∗
We study a fiscal policy model in which the government is present-biased towards public spending. Society chooses a fiscal rule to trade off the benefit of committing the government to not overspend against the benefit of granting it flexibility to react to privately observed shocks to the value of spending. Unlike prior work, we characterize rules that are self-enforcing: the government must p...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2012
ISSN: 1556-5068
DOI: 10.2139/ssrn.2140520