Why Are Stabilizations Delayed?

Alberto Alesina and Allan Drazen ()

American Economic Review, 1991, vol. 81, issue 5, 1170-88

Abstract: When a stabilization has significant distributional implications (e.g., tax increases to eliminate a large budget deficit), socioeconomic groups may attempt to shift the burden of stabilization onto other groups. The process leading to stabilization becomes a "war of attrition," each group attempting to wait the others out and stabilization occurring only when one group concedes and bears a disproportionate share of the burden. The authors solve for the expected time of stabilization in a model of "rational" delay and relate it to several political and economic variables. They motivate this approach and its results by comparison to historical and current episodes. Copyright 1991 by American Economic Association.

Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (1031)

Downloads: (external link)
http://links.jstor.org/sici?sici=0002-8282%2819911 ... O%3B2-V&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
Working Paper: Why are Stabilizations Delayed (1991)
Working Paper: Why Are Stabilizations Delayed? (1991)
Working Paper: Why are Stabilizations Delayed? (1989)
Working Paper: Why Are Stabilizations Delayed? (1988)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:81:y:1991:i:5:p:1170-88

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().