Fiscal Transparency and Procyclical Fiscal Policy

This paper examines why fiscal policy is procyclical in developing as well as developed countries. We introduce the concept of fiscal transparency into a model of retrospective voting, in which a political agency problem between voters and politicians generates a procyclical bias in government spending. The introduction of fiscal transparency generates two new predictions: 1) the procyclical bias in fiscal policy arises only in good times; and 2) a higher degree of fiscal transparency reduces the bias in good times. We find solid empirical support for both predictions using data on both OECD countries and a broader set of countries.fiscal transparency; fiscal policy; procyclicality; business cycle; political economy

A Simple Correctness Proof of the Direct-Style Transformation

We build on Danvy and Nielsen's first-order program transformation into continuation-passing style (CPS) to present a new correctness proof of the converse transformation, i.e., a one-pass transformation from CPS back to direct style. Previously published proofs were based on, e.g., a one-pass higher-order CPS transformation, and were complicated by having to reason about higher-order functions. In contrast, this work is based on a one-pass CPS transformation that is both compositional and first-order, and therefore the proof simply proceeds by structural induction on syntax

A Selective CPS Transformation

The CPS transformation makes all functions continuation-passing, uniformly. Not all functions, however, need continuations: they only do if their evaluation includes computational effects. In this paper we focus on control operations, in particular ``call with current continuation'' and ``throw''. We characterize this involvement as a control effect and we present a selective CPS transformation that makes functions and expressions continuation-passing if they have a control effect, and that leaves the rest of the program in direct style. We formalize this selective CPS transformation with an operational semantics and a simulation theorem à la Plotkin