Governments use national debt and the budget deficit as measures of fiscal position. But what should government policy aim to achieve with respect to these measures? Are these the right summary measures at which to be looking? This paper considers what the government should use as its fiscal targets to achieve policies that are consistent with long-term fiscal objectives. Among its findings are...

With the continued growth in demand for mineral resources and China's efforts in increasing investment in geological prospecting, fiscal investment in geological exploration becomes a research hotspot. This paper examines the yearly relationship among fiscal investment in geological exploration of the current term, that of the last term and prices of mining rights over the period 1999-2009. Hin...

Perception and recognition of faces presented upright are better than Perception and recognition of faces presented inverted. The difference between upright and inverted orientations is greater in face recognition than in non-face object recognition. This Face-Inversion Effect is explained by the “Configural Processing” hypothesis that inversion disrupts configural information processing and le...

To guide our actions, the brain has developed mechanisms to code target locations in egocentric coordinates (i.e., with respect to the observer), and to update these when the observer moves. The latter mechanism, called visuomotor updating, is implemented in the dorsal visual stream of the brain. In contrast, the ventral visual stream is assumed to transform target locations into an allocentric...

Does an assimilative illusion like the Delboeuf illusion occur in the human face? We investigated factors that might influence the perceived size of the eyes in a realistic face. Experiment 1 manipulated the position of the eyebrows (high or low), the presence/absence of eye shadow, and the viewing distance (0.6 m or 5 m), then measured the perceived eye size using a psychophysical method. The ...

This paper explores the implications of the political economy model of Battaglini and Coate (2008) for the behavior of fiscal policy over the business cycle. The model predicts that fiscal policy is counter-cyclical with debt increasing in recessions and decreasing in booms. Public spending increases in booms and decreases during recessions, while tax rates decrease during booms and increase in...

The paper examines the political business cycles theory in the case of Croatia. The paper is structured in two parts: an overview of theoretical background and an empirical analysis of opportunistic political cycles in Croatia. The first part presents a detailed insight into different political business cycle models, while the second part tests econometrically whether fiscal policy cycles exist...

We study the cyclical behavior of fiscal policy to explain why some countries exhibit pro-cyclical fiscal policy stances–being expansionary in good times and contractionary in bad times. We develop a model that links the polarization of preferences over fiscal spending to the pro-cyclicality bias. We then present evidence that social polarization as measured by income inequality and educational...

We study discretionary non-cooperative monetary and fiscal policy stabilization in the New Keynesian model, where the fiscal authority uses distortionary taxes as policy instrument. We explicitly model different frequencies of fiscal and monetary policy operations. We find that standard models of monetary and fiscal policy interactions may substantially overestimate the social gain from the sta...