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 … Condorcet winners under debt-sensitive majority rules and derive their properties. We find that equilibrium debt-levels are …

Our aim is to provide insights into some basic facts of US government debt management by introducing simple financial … frictions in a Ramsey model of fiscal policy. We find that the share of short bonds in total U.S. debt is large, persistent, and … highly correlated with total debt. A well known literature argues that optimal debt management should behave very differently …

The aim of this Paper is to test for the extent of incompleteness in the market for US Government debt. We show that … when a government pursues an optimal tax policy and issues a full set of contingent claims, the value of debt has the same …. Examining US data, however, reveals that debt is substantially more persistent than other variables and increases in response to …

on debt dynamics for the eight new member states from Central and Eastern Europe. We find that the nominal Maastricht … achieve the fiscal criteria. Our results suggest all countries would find it harder to restrain debt growth within the euro …, but that the magnitude of this effect varies substantially across countries, as do the debt dynamics outside the euro. If …

I analyze how lack of commitment affects the maturity structure of sovereign debt. Governments balance benefits of …-term debt affects default and rollover decisions by subsequent policy makers. The equilibrium maturity structure is shaped by … revenue losses on inframarginal units of debt that reflect the price impact of these decisions. The model predicts an interior …

gross debt may not exceed 60% of GDP. The paper concludes that the adoption of these two universal fiscal reference values …

governments fail to fully internalize the inflationary consequences of their debt policies, which results in excessive debt … a stability pact which punishes excessive debt accumulation. With idiosyncratic shocks to governments’ budgets, EMU … corrects the average debt bias, inflation, which is attuned to the Union-average debt level, is more stable. …

debt, vigorous political competition can render a compromise unsustainable and drive the economy to a low-welfare, high-debt … the ability of governments to issue debt. …