Public Debt Stabilization: Redistributive Delays Versus Preemptive Anticipations
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.
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|Date of revision:||Dec 2011|
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- 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.
- Enrico Spolaore, 2004. "Adjustments in Different Government Systems," Economics and Politics, Wiley Blackwell, vol. 16(2), pages 117-146, 07.
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