| Publication type: | Conference other |
| Type of review: | No review |
| Title: | Debt-sensitive majority rules |
| Authors: | Becker, Johannes Gerd Gersbach, Hans Grimm, Oliver |
| Conference details: | MPI Econ Workshop, Bonn, Germany, 30 June 2010 |
| Issue Date: | 2010 |
| Language: | English |
| Subjects: | Econ Workshop; Rule; Majority |
| 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/11475/13823 |
| Fulltext version: | Published version |
| 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., Gersbach, H., & Grimm, O. (2010). Debt-sensitive majority rules. MPI Econ Workshop, Bonn, Germany, 30 June 2010.
Becker, J.G., Gersbach, H. and Grimm, O. (2010) ‘Debt-sensitive majority rules’, in MPI Econ Workshop, Bonn, Germany, 30 June 2010.
J. G. Becker, H. Gersbach, and O. Grimm, “Debt-sensitive majority rules,” in MPI Econ Workshop, Bonn, Germany, 30 June 2010, 2010.
BECKER, Johannes Gerd, Hans GERSBACH und Oliver GRIMM, 2010. Debt-sensitive majority rules. In: MPI Econ Workshop, Bonn, Germany, 30 June 2010. Conference presentation. 2010
Becker, Johannes Gerd, Hans Gersbach, and Oliver Grimm. 2010. “Debt-Sensitive Majority Rules.” Conference presentation. In MPI Econ Workshop, Bonn, Germany, 30 June 2010.
Becker, Johannes Gerd, et al. “Debt-Sensitive Majority Rules.” MPI Econ Workshop, Bonn, Germany, 30 June 2010, 2010.
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