Fiscal Rules and Discretion under Persistent Shocks
---- Acknowledgements -----
We would like to thank Manuel Amador, Sylvain Chassang, Navin Kartik, Ciamac Moallemi, Emi Nakamura, Ali Shourideh, Paolo Siconolfi, Jón Steinsson, Bruno Strulovici, Steve Tadelis, Aleh Tsyvinski, Iván Werning, Steve Zeldes, seminar participants at Brown, Columbia, Duke, Minneapolis Fed, New York Fed, Princeton, and Yeshiva, and participants at the NBER SI 2012 Political Economy Public Finance workshop and the SED conference for comments. Sergey Kolbin provided excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.