Debt-sharing and secession: a generational accounting approach
Philippe Cattoir and
Frédéric Docquier ()
No 2000003, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
This paper investigates one of the most important financial issues arising from a secession or a country partioning, namely the sharing of the national public debt. Extending Dreze's distributive neutrality condition, we use the generational accounting technique and propose a dynamic debt-sharing criterion which takes into account both the true debt future generations inherit and their contributive capacity. The equivalence with Dreze's static rule is only obtained in the steady growth framework in the absence of initial regional debt. An application of our criterion to the Belgian case offers striking results.
Keywords: debt-sharing; public debt; secession; generational accounting; distributive neutrality. (search for similar items in EconPapers)
JEL-codes: H60 H77 (search for similar items in EconPapers)
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Journal Article: Debt-sharing and Secession: A Generational Accounting Approach (2004)
Working Paper: Debt-sharing and Secession: A Generational Accounting Approach (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2000003
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