TY  - JOUR
AU  - Tabellini,Guido
TI  - The Politics of Intergenerational Redistribution
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3058
PY  - 1989
Y2  - August 1989
UR  - http://www.nber.org/papers/w3058
L1  - http://www.nber.org/papers/w3058.pdf
N1  - Author contact info:
Guido Tabellini
IGIER Universita' Bocconi
Via Roentgen 1
20136 Milano
Italy
Tel: 39 2 583 6 3305; fax 3302
E-Mail: guido.tabellini@unibocconi.it
AB  - 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. 
ER  -