Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288373 
Year of Publication: 
2020
Citation: 
[Journal:] Social Choice and Welfare [ISSN:] 1432-217X [Volume:] 55 [Issue:] 2 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2020 [Pages:] 301-323
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
Is there a link between public debt and wealth inequality? Could government bondholders use intra-generational redistribution strategically to make the repayment of debt politically viable? We reconsider the model of Tabellini (J Polit Econ 99:335–357, 1991) and expose the role of coordination and divide-and-conquer. By coordinating their bond investments, the old generation splits up the young generation and secures a majority favoring debt repayment. Coordination therefore mediates the impact of wealth inequality on public debt. We test the model in a laboratory experiment and find that subjects often coordinate to exploit the link between inter- and intragenerational redistribution. Hence, coordination plays an important role in the strategic creation and exploitation of minorities, and thus in the accumulation of public debt.
Subjects: 
Economic Theory/Quantitative Economics/Mathematical Methods
Public Finance
International Political Economy
Game Theory, Economics, Social and Behav. Sciences
Social Policy
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.