The Making of Economic Policy begins by observing that most countries' trade policies are so blatantly contrary to all the prescriptions of the economist that there is no way to understand this discrepancy except by delving into the politics. The same is true for many other dimensions of...

We consider the political economy of a monetary union where member governments attempt to influence the policy of the common central bank. Modeling this as a common agency with incentive contracts, we show that if incentives are all that matters for the bank, the equilibrium implements a...

We model the electoral politics of redistribution. Taxation has efficiency and equity effects. Citizens and parties care about inequality in addition to their private concerns for consumption and votes respectively. In equilibrium, each party's strategy can be implemented by a proportional...