PUBLIC DEBT STABILIZATION: REDISTRIBUTIVE DELAYS VERSUS PREEMPTIVE ANTICIPATIONS

Paulo Júlio

No 45, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: 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.

Keywords: Stabilization delays; Economic adjustments; Economic reforms; Majority voting (search for similar items in EconPapers)
JEL-codes: D72 E60 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2011-11, Revised 2011-12
New Economics Papers: this item is included in nep-cdm and nep-pbe
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https://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_45.pdf First version, 2011 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0045

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