It follows that temporary windfall income should be largely saved, through some mix of accumulating foreign assets and (subject to capacity limitations) adding to the domestic capital stock. While these principles are easily stated, it is not so easy to implement, in view of the obvious political economy pressures to increase consumption and domestic transfers in response to extra income.
Accordingly, the optimal fiscal strategy depends not only on the expected duration of the fiscal windfall but also on the risks associated with the cessation of these extra revenues. As 4/7  BIS central bankers' speeches  discussed above, there are clear tail risk scenarios that could induce a reversal in the level of corporation tax revenues.