search query: @indexterm INTERNATIONAL CO-OPERATION / total: 240
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| Author: | Tabellini, G. |
| Title: | Domestic politics and the international coordination of fiscal policies |
| Journal: | Journal of International Economics
1990 : MAY, VOL. 28:3-4, p. 245-265 |
| Index terms: | FISCAL POLICY INTERNATIONAL CO-OPERATION BUDGET SOCIAL WELFARE ECONOMIC POLICY POLITICS |
| Language: | eng |
| Abstract: | The desirability of international fiscal policy coordination in the presence of a domestic political distortion is investigated. The domestic distortion results from the inability of the current policymaker to enter into a binding agreement with future policymakers about the composition of public spending. The distortion generates a bias towards budget deficits. International coordination can make the deficit a lot worse, and thus reduce social welfare at home and abroad. The reason is that international coordination reduces the cost of running budget deficits, and thus enhances the adverse effects of the domestic political distortion. |
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