"Fiscal policy Econometric models." . . . . . . . . . . . "\"Governments are present-biased toward spending. Fiscal rules are deficit limits that trade off commitment to not overspend and flexibility to react to shocks. The authors compare centralized rules - chosen jointly by all countries - to decentralized rules. If governments' present bias is small, centralized rules are tighter than decentralized rules: individual countries do not internalize the redistributive effect of interest rates. However, if the bias is large, centralized rules are slacker: countries do not internalize the disciplining effect of interest rates. Surplus limits and money burning enhance welfare, and inefficiencies arise if some countries adopt stricter rules than imposed centrally.\"--Abstract." . . "Fiscal rules and discretion in a world economy" . "Government spending policy Econometric models." . . "National Bureau of Economic Research." . .