Coordinating intergenerational redistribution and the repayment of public debt: an experimental test of Tabellini (1991)
Faculty/Professorship: | Economic Theory |
Author(s): | March, Christoph ![]() |
Publisher Information: | Bamberg : Otto-Friedrich-Universität |
Year of publication: | 2022 |
Pages: | 301-323 |
Source/Other editions: | Social Choice and Welfare - 55 (2020), 2. S. 301-323 - ISSN: 1432-217X, 0176-1714 |
is version of: | 10.1007/s00355-020-01242-6 |
Year of first publication: | 2020 |
Language(s): | English |
Licence: | Creative Commons - CC BY - Attribution 4.0 International |
URN: | urn:nbn:de:bvb:473-irb-534477 |
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. |
GND Keywords: | Öffentliche Schulden; Verteilungsgerechtigkeit; Generationengerechtigkeit; Wertpapieranlage; Vermögensumverteilung |
Keywords: | public debt, wealth inequality, generation split, bond investment, redistribution |
DDC Classification: | 330 Economics 650 Management & public relations |
RVK Classification: | QC 160 |
Type: | Article |
URI: | https://fis.uni-bamberg.de/handle/uniba/53798 |
Release Date: | 17. May 2022 |
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