Optimal Taxation and Strategic Budget Deficit Under Political Regime Switching
建立了一个动态政治经济学模型，分析党派政治下政府如何利用不对称信息通过战略性预算赤字（或盈余）影响效用分配，并探讨选举概率内生时这一结果的可能反转。
I develop a dynamic political economy theory of optimal taxation and budget distortions in a model with partisan politics. Under asymmetric information, politics affects the distribution of utilities in the economy. Political regime switching introduces fluctuations of this distribution. These fluctuations justify strategic budget distortions by governments currently holding office and willing to favour their redistributive concerns against future majority. Under quite general assumptions on preferences, these distortions take the form of budget deficits (resp. surpluses) with leftist (rightist) governments. Endogenizing the probabilities of getting elected may reverse this result.