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Public Debt Stabilization: Redistributive Delays Versus Preemptive Anticipations


  • Paulo Júlio

    () (Gabinete de Estratégia e Estudos, Portuguese Ministry of Economy and Employment)


This 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.

Suggested Citation

  • Paulo Júlio, 2011. "Public Debt Stabilization: Redistributive Delays Versus Preemptive Anticipations," GEE Papers 0045, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Dec 2011.
  • Handle: RePEc:mde:wpaper:0045

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    References listed on IDEAS

    1. Enrico Spolaore, 2004. "Adjustments in Different Government Systems," Economics and Politics, Wiley Blackwell, vol. 16(2), pages 117-146, July.
    2. Martinelli, Cesar & Escorza, Raul, 2007. "When are stabilizations delayed? Alesina-Drazen revisited," European Economic Review, Elsevier, vol. 51(5), pages 1223-1245, July.
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    More about this item


    Stabilization delays; Economic adjustments; Economic reforms; Majority voting;

    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

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