Public Debt Stabilization: Redistributive Delays Versus Preemptive Anticipations
AbstractThis article illustrates and formalizes the conditions under which majority voting can lead to either delays or anticipations in public debt stabilizations. Under the assumptions of proportional taxation and universal public expenditures, we present an intertemporal version of the “Meltzer-Richard” result, which captures the difficulty of controlling increases in public expenditures. In the benchmark model delays are endogenous and have redistributive effects, but when a relatively rich minority makes the decisions, we may observe anticipation in public debt stabilization.
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Bibliographic InfoPaper provided by Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação in its series GEE Papers with number 0045.
Length: 15 pages
Date of creation: Nov 2011
Date of revision: Dec 2011
Stabilization delays; Economic adjustments; Economic reforms; Majority voting;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-10 (All new papers)
- NEP-CDM-2012-01-10 (Collective Decision-Making)
- NEP-PBE-2012-01-10 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martinelli, Cesar & Escorza, Raul, 2007.
"When are stabilizations delayed? Alesina-Drazen revisited,"
European Economic Review,
Elsevier, vol. 51(5), pages 1223-1245, July.
- César Martinelli & Raúl Escorza, 2005. "When Are Stabilizations Delayed? Alesina-Drazen Revisited," Levine's Bibliography 122247000000000667, UCLA Department of Economics.
- Cesar Martinelli & Raul Escorza, 2004. "When Are Stabilizations Delayed? Alesina-Drazen Revisited," Working Papers 0408, Centro de Investigacion Economica, ITAM.
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