Majoritarian delays


Autoria(s): Júlio, Paulo
Data(s)

27/03/2014

27/03/2014

12/05/2007

Resumo

This paper illustrates how delayed debt stabilizations can arise in a society without any emerging conflict of interests among its members. We argue that, under a majority voting rule, the economy may generate excessive levels of government spending and larger debts over time, and that this delay is increasing in income inequality. The intuition for this result is simple: a majority of citizens may find in delaying stabilizations a way to increase government expenditures, transferring in this way resources from the richest to the poorest citizens in the economy. This process may explain the upward trend and the difficulty to reduce public expenditures, the so called "ratchet effect."

Identificador

http://hdl.handle.net/10362/11860

Idioma(s)

eng

Publicador

Nova SBE

Relação

Nova School of Business and Economics Working Paper Series;513

Direitos

openAccess

Palavras-Chave #Stabilization delays #Economic adjustments #Economic reforms #Majority voting
Tipo

other