The Politics of Intergenerational Redistribution / Guido Tabellini.

Format:

Book

Author/Creator:

Tabellini, Guido.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3058.

NBER working paper series no. w3058

Language:

English

Subjects (All):

Altruism.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1989.

Cambridge, Mass. : National Bureau of Economic Research, 1989.

Summary:

This paper studies the political-economic equilibrium of a two-period model with overlapping generations. In each period the policy is chosen under majority rule by the generations currently alive. The paper identifies a "sustainable set" of values for public debt. Any amount of debt within this set is fully repaid in equilibrium, even in the absence of commitments. By issuing debt within this set, the first generation of voters redistributes revenue in its favor and away from the second generation. The paper characterizes the determinants of the equilibrium intergenerational redistribution carried out in this way, and points to a difference between debt policy and social security legislation as instruments of redistribution. The key features of the model are heterogeneity within each generation and altruism across generations.

Notes:

Print version record

August 1989.