This paper extends the Talvi and Végh (2005) model on the behavior of fiscal policy, introducing agent-based issues. Like in Talvi and Végh (2005), the theoretical framework is à la Barro (1979), but rational expectations are costly. The agents can choose between two strategies in forming...

The “unhappy growth paradox” found by Deaton (2008) and Lora and Chaparro (2008) on the Gallup World Pool (GWP) 2006 is inconsistent with the literature in terms of the impact of income on well-being in the short term. This paper incorporates alternatively inequality indicators and the...