Econometrica, 2012-11, Vol.80 (6), p.2785-2803
2012
Details
- Autor(en) / Beteiligte
- Titel
- ROTTEN PARENTS AND DISCIPLINED CHILDREN: A POLITICO-ECONOMIC THEORY OF PUBLIC EXPENDITURE AND DEBT
- Ist Teil von
- Econometrica, 2012-11, Vol.80 (6), p.2785-2803
- Ort / Verlag
- Oxford, UK: Econometric Society
- Erscheinungsjahr
- 2012
- Link zum Volltext
- Quelle
- Wiley Online Library All Journals
- Beschreibungen/Notizen
- This paper proposes a dynamic politico-economic theory of fiscal policy in a world comprising a set of small open economies, whose driving force is the intergenerational conflict over debt, taxes, and public goods. Subsequent generations of voters choose fiscal policy through repeated elections. The presence of young voters induces fiscal discipline, that is, low taxes and low debt accumulation. The paper characterizes the Markov-perfect equilibrium of the voting game in each economy, as well as the stationary equilibrium debt distribution and interest rate of the world economy. The equilibrium can reproduce some salient features of fiscal policy in modern economies.
- Sprache
- Englisch
- Identifikatoren
- ISSN: 0012-9682eISSN: 1468-0262DOI: 10.3982/ECTA8910Titel-ID: cdi_proquest_miscellaneous_1272078037
- Format
- –
- Schlagworte
- Applications, Biology, psychology, social sciences, Debt, Deficit financing, Distribution, Economic theory, Economics, Equilibrium, Exact sciences and technology, Financial economics, Fiscal policy, general equilibrium, government debt, Income taxes, Insurance, economics, finance, Interest rates, intergenerational conflict, Labor supply, Markov analysis, Markov equilibrium, Mathematics, NOTES AND COMMENTS, political economy, Probability and statistics, Public debt, Public goods, repeated voting, Sciences and techniques of general use, small open economies, Statistics, Steady state economies, Studies, Taxes