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The Dubious Ethics of Debt Default


  • Geoffrey Brennan

    (ANU University of Rome)

  • Giuseppe Eusepi

    (ANU University of Rome)


This article is an engagement with a piece of Buchanan’s on the ethics of debt default, in which Buchanan proved to be surprisingly sympathetic to debt default as an option. Debt default is a current period transfer from bondholders to taxpayers at large. Default cannot then serve to improve, in aggregate, the lot of the generation whose bequest receipts may have been diminished by the use of debt financing. Current generations of taxpayers may have a legitimate complaint against past generations of voters/taxpayers who used debt financing (and reduced their net bequests thereby), but that past generation is beyond the grave and cannot provide recompense.

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  • Geoffrey Brennan & Giuseppe Eusepi, 2002. "The Dubious Ethics of Debt Default," Public Finance Review, , vol. 30(6), pages 546-561, November.
  • Handle: RePEc:sae:pubfin:v:30:y:2002:i:6:p:546-561

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    References listed on IDEAS

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    Cited by:

    1. Seema Jayachandran & Michael Kremer, 2006. "Odious Debt," American Economic Review, American Economic Association, vol. 96(1), pages 82-92, March.
    2. Ernesto Longobardi & Antonio Pedone, 2016. "On some recent proposals of public debt restructuring in the Eurozone," SERIES 06-2016, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Sep 2016.
    3. repec:ces:ifodic:v:14:y:2017:i:4:p:19267794 is not listed on IDEAS
    4. Andrea Rieck & Ludger Schuknecht, 2017. "Preserving Government Solvency: A Global Policy Perspective," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(4), pages 71-81, 02.

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