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Fabrizio Zilibotti - One of the best experts on this subject based on the ideXlab platform.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
Econometrica, 2012Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of fiscal policy in a world comprising a set of small open economies, whose driving force is the intergenerational conflict over debt, taxes, and public goods. Subsequent generations of voters choose fiscal policy through repeated elections. The presence of young voters induces fiscal discipline, that is, low taxes and low debt accumulation. The paper characterizes the Markov-perfect equilibrium of the Voting Game in each economy, as well as the stationary equilibrium debt distribution and interest rate of the world economy. The equilibrium can reproduce some salient features of fiscal policy in modern economies.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
Memorandum (institute of Pacific Relations American Council), 2007Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of debt, government finance and expenditure. Agents have preferences over a private and government-provided public good, financed through labour taxation. Subsequent generations of voters choose taxation, government expenditure and debt accumulation through repeated elections. Debt introduces a conflict of interest between young and old voters: the young want more fiscal discipline as they are concerned with the ability to of future governments to provide public goods. We characterize the Markov Perfect Equilibrium of the dynamic Voting Game. If taxes do not distort labour supply, the economy progressively depletes its resources through debt accumulation, leaving future genereations "enslaved". However, if tax distortions are sufficiently large, the economy converges to a stationary debt level which is bounded away from the endogenous debt limit. We extend the analysis to redistributive policies and political shocks. Consistent with the empirical evidence, our theory predicts governement debt to be mean reverting and debt growth to be larger under right-wing than under left-wing governments.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
Research Papers in Economics, 2007Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of debt, government finance and expenditure. Agents have preferences over a private and a government-provided public good, financed through labor taxation. Subsequent generations of voters choose taxation, government expenditure and debt accumulation through repeated elections. Debt introduces a conflict of interest between young and old voters: the young want more fiscal discipline. We characterize the Markov Perfect Equilibrium of the dynamic Voting Game. If taxes do not distort labor supply, the economy progressively depletes its resources through debt accumulation, leaving future generations i?½enslavedi?½. However, if tax distortions are sufficiently large, the economy converges to a stationary debt level which is bounded away from the endogenous debt limit. The current fiscal policy is disciplined by the concern of young voters for the ability of future government to provide public goods. The steady-state and dynamics of debt depend on the votersi?½ taste for public consumption. The stronger the preference for public consumption, the less debt is accumulates. We extend the analysis to redistributive policies and political shocks. The theory predicts government debt to be mean reverting and debt growth to be larger under right-wing than under left-wing governments. Data from the US and from a panel of 21 OECD countries confirm these theoretical predictions.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
2007Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of fiscal policy in a world comprising a set of small open economies, whose driving force is the intergenerational conflict over debt, taxes, and public goods. Subsequent generations of voters choose fiscal policy through repeated elections. The presence of young voters induces fiscal discipline, i.e., low taxes and low debt accumulation. The paper characterizes the Markov-perfect equilibrium of the Voting Game in each economy, as well as the stationary equilibrium debt distribution and interest rate of the world economy. The equilibrium can reproduce some salient features of fiscal policy in modern economies.
Zheng Song - One of the best experts on this subject based on the ideXlab platform.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
Econometrica, 2012Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of fiscal policy in a world comprising a set of small open economies, whose driving force is the intergenerational conflict over debt, taxes, and public goods. Subsequent generations of voters choose fiscal policy through repeated elections. The presence of young voters induces fiscal discipline, that is, low taxes and low debt accumulation. The paper characterizes the Markov-perfect equilibrium of the Voting Game in each economy, as well as the stationary equilibrium debt distribution and interest rate of the world economy. The equilibrium can reproduce some salient features of fiscal policy in modern economies.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
Memorandum (institute of Pacific Relations American Council), 2007Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of debt, government finance and expenditure. Agents have preferences over a private and government-provided public good, financed through labour taxation. Subsequent generations of voters choose taxation, government expenditure and debt accumulation through repeated elections. Debt introduces a conflict of interest between young and old voters: the young want more fiscal discipline as they are concerned with the ability to of future governments to provide public goods. We characterize the Markov Perfect Equilibrium of the dynamic Voting Game. If taxes do not distort labour supply, the economy progressively depletes its resources through debt accumulation, leaving future genereations "enslaved". However, if tax distortions are sufficiently large, the economy converges to a stationary debt level which is bounded away from the endogenous debt limit. We extend the analysis to redistributive policies and political shocks. Consistent with the empirical evidence, our theory predicts governement debt to be mean reverting and debt growth to be larger under right-wing than under left-wing governments.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
Research Papers in Economics, 2007Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of debt, government finance and expenditure. Agents have preferences over a private and a government-provided public good, financed through labor taxation. Subsequent generations of voters choose taxation, government expenditure and debt accumulation through repeated elections. Debt introduces a conflict of interest between young and old voters: the young want more fiscal discipline. We characterize the Markov Perfect Equilibrium of the dynamic Voting Game. If taxes do not distort labor supply, the economy progressively depletes its resources through debt accumulation, leaving future generations i?½enslavedi?½. However, if tax distortions are sufficiently large, the economy converges to a stationary debt level which is bounded away from the endogenous debt limit. The current fiscal policy is disciplined by the concern of young voters for the ability of future government to provide public goods. The steady-state and dynamics of debt depend on the votersi?½ taste for public consumption. The stronger the preference for public consumption, the less debt is accumulates. We extend the analysis to redistributive policies and political shocks. The theory predicts government debt to be mean reverting and debt growth to be larger under right-wing than under left-wing governments. Data from the US and from a panel of 21 OECD countries confirm these theoretical predictions.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
2007Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of fiscal policy in a world comprising a set of small open economies, whose driving force is the intergenerational conflict over debt, taxes, and public goods. Subsequent generations of voters choose fiscal policy through repeated elections. The presence of young voters induces fiscal discipline, i.e., low taxes and low debt accumulation. The paper characterizes the Markov-perfect equilibrium of the Voting Game in each economy, as well as the stationary equilibrium debt distribution and interest rate of the world economy. The equilibrium can reproduce some salient features of fiscal policy in modern economies.
Kjetil Storesletten - One of the best experts on this subject based on the ideXlab platform.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
Econometrica, 2012Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of fiscal policy in a world comprising a set of small open economies, whose driving force is the intergenerational conflict over debt, taxes, and public goods. Subsequent generations of voters choose fiscal policy through repeated elections. The presence of young voters induces fiscal discipline, that is, low taxes and low debt accumulation. The paper characterizes the Markov-perfect equilibrium of the Voting Game in each economy, as well as the stationary equilibrium debt distribution and interest rate of the world economy. The equilibrium can reproduce some salient features of fiscal policy in modern economies.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
Memorandum (institute of Pacific Relations American Council), 2007Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of debt, government finance and expenditure. Agents have preferences over a private and government-provided public good, financed through labour taxation. Subsequent generations of voters choose taxation, government expenditure and debt accumulation through repeated elections. Debt introduces a conflict of interest between young and old voters: the young want more fiscal discipline as they are concerned with the ability to of future governments to provide public goods. We characterize the Markov Perfect Equilibrium of the dynamic Voting Game. If taxes do not distort labour supply, the economy progressively depletes its resources through debt accumulation, leaving future genereations "enslaved". However, if tax distortions are sufficiently large, the economy converges to a stationary debt level which is bounded away from the endogenous debt limit. We extend the analysis to redistributive policies and political shocks. Consistent with the empirical evidence, our theory predicts governement debt to be mean reverting and debt growth to be larger under right-wing than under left-wing governments.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
Research Papers in Economics, 2007Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of debt, government finance and expenditure. Agents have preferences over a private and a government-provided public good, financed through labor taxation. Subsequent generations of voters choose taxation, government expenditure and debt accumulation through repeated elections. Debt introduces a conflict of interest between young and old voters: the young want more fiscal discipline. We characterize the Markov Perfect Equilibrium of the dynamic Voting Game. If taxes do not distort labor supply, the economy progressively depletes its resources through debt accumulation, leaving future generations i?½enslavedi?½. However, if tax distortions are sufficiently large, the economy converges to a stationary debt level which is bounded away from the endogenous debt limit. The current fiscal policy is disciplined by the concern of young voters for the ability of future government to provide public goods. The steady-state and dynamics of debt depend on the votersi?½ taste for public consumption. The stronger the preference for public consumption, the less debt is accumulates. We extend the analysis to redistributive policies and political shocks. The theory predicts government debt to be mean reverting and debt growth to be larger under right-wing than under left-wing governments. Data from the US and from a panel of 21 OECD countries confirm these theoretical predictions.
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rotten parents and disciplined children a politico economic theory of public expenditure and debt
2007Co-Authors: Zheng Song, Kjetil Storesletten, Fabrizio ZilibottiAbstract:This paper proposes a dynamic politico-economic theory of fiscal policy in a world comprising a set of small open economies, whose driving force is the intergenerational conflict over debt, taxes, and public goods. Subsequent generations of voters choose fiscal policy through repeated elections. The presence of young voters induces fiscal discipline, i.e., low taxes and low debt accumulation. The paper characterizes the Markov-perfect equilibrium of the Voting Game in each economy, as well as the stationary equilibrium debt distribution and interest rate of the world economy. The equilibrium can reproduce some salient features of fiscal policy in modern economies.
Nicholas R Jennings - One of the best experts on this subject based on the ideXlab platform.
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a linear approximation method for the shapley value
Artificial Intelligence, 2008Co-Authors: Shaheen Fatima, Michael Wooldridge, Nicholas R JenningsAbstract:The Shapley value is a key solution concept for coalitional Games in general and Voting Games in particular. Its main advantage is that it provides a unique and fair solution, but its main drawback is the complexity of computing it (e.g., for Voting Games this complexity is #p-complete). However, given the importance of the Shapley value and Voting Games, a number of approximation methods have been developed to overcome this complexity. Among these, Owen's multi-linear extension method is the most time efficient, being linear in the number of players. Now, in addition to speed, the other key criterion for an approximation algorithm is its approximation error. On this dimension, the multi-linear extension method is less impressive. Against this background, this paper presents a new approximation algorithm, based on randomization, for computing the Shapley value of Voting Games. This method has time complexity linear in the number of players, but has an approximation error that is, on average, lower than Owen's. In addition to this comparative study, we empirically evaluate the error for our method and show how the different parameters of the Voting Game affect it. Specifically, we show the following effects. First, as the number of players in a Voting Game increases, the average percentage error decreases. Second, as the quota increases, the average percentage error decreases. Third, the error is different for players with different weights; players with weight closer to the mean weight have a lower error than those with weight further away. We then extend our approximation to the more general k-majority Voting Games and show that, for n players, the method has time complexity O(k^2n) and the upper bound on its approximation error is O(k^2/n).
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an anytime approximation method for the inverse shapley value problem
Adaptive Agents and Multi-Agents Systems, 2008Co-Authors: Shaheen Fatima, Michael Wooldridge, Nicholas R JenningsAbstract:Coalition formation is the process of bringing together two or more agents so as to achieve goals that individuals on their own cannot, or to achieve them more efficiently. Typically, in such situations, the agents have conflicting preferences over the set of possible joint goals. Thus, before the agents realize the benefits of cooperation, they must find a way of resolving these conflicts and reaching a consensus. In this context, cooperative Game theory offers the Voting Game as a mechanism for agents to reach a consensus. It also offers the Shapley value as a way of measuring the influence or power a player has in determining the outcome of a Voting Game. Given this, the designer of a Voting Game wants to construct a Game such that a player's Shapley value is equal to some desired value. This is called the inverse Shapley value problem. Solving this problem is necessary, for instance, to ensure fairness in the players' Voting powers. However, from a computational perspective, finding a player's Shapley value for a given Game is #P-complete. Consequently, the problem of verifying that a Voting Game does indeed yield the required powers to the agents is also #P-complete. Therefore, in order to overcome this problem we present a computationally efficient approximation algorithm for solving the inverse problem. This method is based on the technique of 'successive approximations'; it starts with some initial approximate solution and iteratively updates it such that after each iteration, the approximate gets closer to the required solution. This is an anytime algorithm and has time complexity polynomial in the number of players. We also analyze the performance of this method in terms of its approximation error and the rate of convergence of an initial solution to the required one. Specifically, we show that the former decreases after each iteration, and that the latter increases with the number of players and also with the initial approximation error.
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a randomized method for the shapley value for the Voting Game
Adaptive Agents and Multi-Agents Systems, 2007Co-Authors: Shaheen Fatima, Michael Wooldridge, Nicholas R JenningsAbstract:The Shapley value is one of the key solution concepts for coalition Games. Its main advantage is that it provides a unique and fair solution, but its main problem is that, for many coalition Games, the Shapley value cannot be determined in polynomial time. In particular, the problem of finding this value for the Voting Game is known to be #P-complete in the general case. However, in this paper, we show that there are some specific Voting Games for which the problem is computationally tractable. For other general Voting Games, we overcome the problem of computational complexity by presenting a new randomized method for determining the approximate Shapley value. The time complexity of this method is linear in the number of players. We also show, through empirical studies, that the percentage error for the proposed method is always less than 20% and, in most cases, less than 5%.
Sascha Kurz - One of the best experts on this subject based on the ideXlab platform.
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on minimum sum representations for weighted Voting Games
Annals of Operations Research, 2012Co-Authors: Sascha KurzAbstract:A proposal in a weighted Voting Game is accepted if the sum of the (non-negative) weights of the “yea” voters is at least as large as a given quota. Several authors have considered representations of weighted Voting Games with minimum sum, where the weights and the quota are restricted to be integers. In Freixas and Molinero (Ann. Oper. Res. 166:243–260, 2009) the authors have classified all weighted Voting Games without a unique minimum sum representation for up to 8 voters. Here we exhaustively classify all weighted Voting Games consisting of 9 voters which do not admit a unique minimum sum integer weight representation.
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on minimum sum representations for weighted Voting Games
Social Science Research Network, 2012Co-Authors: Sascha KurzAbstract:A proposal in a weighted Voting Game is accepted if the sum of the (non-negative) weights of the "yea" voters is at least as large as a given quota. Several authors have considered representations of weighted Voting Games with minimum sum, where the weights and the quota are restricted to be integers. In Freixas and Molinero (2009) the authors have classified all weighted Voting Games without a unique minimum sum representation for up to 8 voters.Here we exhaustively classify all weighted Voting Games consisting of 9 voters, which do not admit a unique minimum sum integer weight representation.
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on minimum sum representations for weighted Voting Games
arXiv: Combinatorics, 2011Co-Authors: Sascha KurzAbstract:A proposal in a weighted Voting Game is accepted if the sum of the (non-negative) weights of the "yea" voters is at least as large as a given quota. Several authors have considered representations of weighted Voting Games with minimum sum, where the weights and the quota are restricted to be integers. Freixas and Molinero have classified all weighted Voting Games without a unique minimum sum representation for up to 8 voters. Here we exhaustively classify all weighted Voting Games consisting of 9 voters which do not admit a unique minimum sum integer weight representation.
