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The Political Economy of Government Debt

In: Handbook of Macroeconomics

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  • Alesina, A.
  • Passalacqua, A.

Abstract

This chapter critically reviews the literature which explains why and under which circumstances governments accumulate more debt than it would be consistent with optimal fiscal policy. We also discuss numerical rules or institutional designs which might lead to a moderation of these distortions.

Suggested Citation

  • Alesina, A. & Passalacqua, A., 2016. "The Political Economy of Government Debt," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2599-2651, Elsevier.
    • Handle: RePEc:eee:macchp:v2-2599
    DOI: 10.1016/bs.hesmac.2016.03.014
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    More about this item

    Keywords

    Political economy; Optimal taxation; Budget rules; Government debt; E62; H63; H21;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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