3  This problem is known in the technical literature as the “time-inconsistency” problem; this literature was pioneered by Kydland and Prescott (1977) and Calvo (1978). This problem is analyzed in the context of monetary policy by Barro and Gordon (1983). 4  Ricardo (1824, p. 506).
5  See, among others, Alesina (1988); Grilli, Masciandaro, and Tabellini (1991); Cukierman (1992); Cukierman, Webb, and Neyapti (1992); Alesina and Summers (1993); Cukierman, Kalaitzidakis, Summers, and Webb (1993); and Cukierman, Miller, and Neyapti (2002).