Bessec, Marie, Desbonnet, Audrey, Kankanamge, Sumudu and Weitzenblum, Thomas (2012) Sur les interactions entre politiques de dette publique et de transfert. Revue d'Économie Politique, vol. 122 (n° 6). pp. 903-920.

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In this paper, we investigate the interactions between public debt and transfer policies in a framework based on Floden [2001], that we extend to allow for transitional dynamics between steady states. First, we show that, starting from a high level of public debt, it is possible to implement a policy that reduces public debt without generating welfare losses, as long as it is associated with transitory transfers adjustments. Secondly, we define and compute an equilibrium that takes into consideration the government’s incentive to implement unexpected adjustments in both public debt and transfers. We show that the long run equilibrium over public debt and transfers in Floden [2001] is not stable with respect to these short term incentives. Simulations reveal that our equilibrium and Floden [2001]’s one considerably differ in quantitative terms.

Item Type: Article
Language: French
Date: 2012
Refereed: Yes
Uncontrolled Keywords: Fiscal Policy, Fiscalité, Public Debt, Dette publique, Transfers, Transferts, Transition, Transition
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 30 May 2016 11:01
Last Modified: 02 Apr 2021 15:53
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