Imperfectly competitive macroeconomic models typically assume a symmetric equilibrium with identical firms, despite the fact that most industries are characterised by substantial degrees of firm heterogeneity. We examine how inter-firm efficiency gaps affect fiscal policy effectiveness under monopolistic competition.  2000 Elsevier Science S.A. All rights reserved.

Since the proof of Theorem 1 is rather cumbersome, it is useful to break it into several lemmas.

This paper, I have focused on the tax side of the fiscal policy to  investigate the past and future behavior of fiscal sustainability in Iran. To do so, I have employed two different forward-looking and backward-looking approaches. First, the backward-looking approach is the fiscal policy rule proposed by Daving & Leeper (2011). Precisely, this rule determines that whether the fiscal policy is ...

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...