A new literature studies the use of capital controls to prevent financial crises. Within this new
framework, we show that when exchange rate policy is costless, there is no need for capital …

A government that cannot commit to future policy choices faces a trade-off that explains the
level of debt. On the one hand, there is an incentive to increase debt and delay taxation, so …

This paper studies optimal fiscal and monetary policy when the nominal interest rate is
subject to the zero lower bound (ZLB) constraint in a stochastic New Keynesian economy. In …

Due to time-inconsistency or political turnover, policymakers' promises are not always
fulfilled. We analyze an optimal fiscal policy problem where the plans made by the …

The Informal Economy: Measures, Causes, and Consequences provides a comprehensive
account of the economics of informality through the lenses of various economic …

Increasing the independence of a central bank from political influence, although ex-ante
socially beneficial and initially successful in reducing inflation, would ultimately fail to lower …

I examine the role of political instability and fractionalization as potential explanations for the
lack of capital flows from rich countries to poor countries (ie, the Lucas Paradox). Using …

The conduct of fiscal and monetary policy absent commitment depends on the interaction
between the objective of smoothing distortions intertemporally and a time-consistency …

We characterise optimal tax policies when the government has access to consumption
taxation and cannot credibly commit to future policies. We consider a neoclassical economy …

I study how the general and specific details of a micro‐founded monetary framework affect
the determination of policy when the government has limited commitment. In the general …