| Publication type: | Working paper – expertise – study |
| Title: | Debt-sensitive majority rules |
| Authors: | Becker, Johannes Gerd Grimm, Oliver Gersbach, Hans |
| Extent: | 52 |
| Issue Date: | 2010 |
| Series: | CEPR Discussion Paper |
| Series volume: | 7860 |
| Publisher / Ed. Institution: | Centre for Economic Policy Research |
| Publisher / Ed. Institution: | London |
| Language: | English |
| Subjects: | Public Good; Debt restriction; Debt-sensitive majority rule; Fiscal policy; Public debt; Simple majority rule; Voting |
| Subject (DDC): | 330: Economics |
| Abstract: | We examine debt-sensitive majority rules. According to such a rule, the higher a planned public debt, the higher the parliamentary majority required to approve it. In a two-period model we compare debt-sensitive majority rules with the simple majority rule when individuals differ regarding their benefits from public-good provision. We establish the existence of Condorcet winners under debt-sensitive majority rules and derive their properties. We find that equilibrium debt-levels are lower under the debt-sensitive majority rule if preferences regarding public goods are sufficiently heterogeneous and if the impact of debt on future public-good provision is sufficiently strong. We illustrate how debt-sensitive majority rules act as political stabilizers in the event of negative macroeconomic shocks. |
| URI: | https://digitalcollection.zhaw.ch/handle/11475/16035 |
| License (according to publishing contract): | Licence according to publishing contract |
| Departement: | School of Management and Law |
| Organisational Unit: | Institute for Risk & Insurance (IRI) |
| Appears in collections: | Publikationen School of Management and Law |
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Becker, J. G., Grimm, O., & Gersbach, H. (2010). Debt-sensitive majority rules. Centre for Economic Policy Research.
Becker, J.G., Grimm, O. and Gersbach, H. (2010) Debt-sensitive majority rules. London: Centre for Economic Policy Research.
J. G. Becker, O. Grimm, and H. Gersbach, “Debt-sensitive majority rules,” Centre for Economic Policy Research, London, 2010.
BECKER, Johannes Gerd, Oliver GRIMM und Hans GERSBACH, 2010. Debt-sensitive majority rules. London: Centre for Economic Policy Research
Becker, Johannes Gerd, Oliver Grimm, and Hans Gersbach. 2010. “Debt-Sensitive Majority Rules.” London: Centre for Economic Policy Research.
Becker, Johannes Gerd, et al. Debt-Sensitive Majority Rules. Centre for Economic Policy Research, 2010.
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