@techreport{NBERw6286,
 title = "Debts and Deficits with Fragmented Fiscal Policymaking",
 author = "Andres Velasco",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "6286",
 year = "1997",
 month = "November",
 URL = "http://www.nber.org/papers/w6286",
 abstract = {This paper develops a political-economic model of fiscal policy - one in which government resources are a  common property' out of which interest groups can finance expenditures on their preferred items.  This setup has striking macroeconomic implications.  Transfers are higher than a benevolent planner would choose; fiscal deficits emerge even when there are no reasons for intertemporal smoothing, and in the long run government debt tends to be excessively high; peculiar time profiles for transfers can emerge, with high positive net transfers early on giving way to high taxes later on; and multiple dynamic equilibrium paths can occur starting at the same initial level of government debt.},
}