The paper examines the economic consequences of political conflicts that arise when countries implement capital controls. In an overlapping-generations model, agents vote on whether to open or close an economy to capital flows. The young (workers) receive income only from wages while the old...

We model and calibrate the arguments in favor and against short-term and long-term debt. These arguments broadly include: <i>maturity premium</i>, <i>sustainability,</i> and <i>service smoothing.</i> We use a dynamic-equilibrium model with tax distortions and government outlays uncertainty, and model maturity as the...

The paper presents an overlapping-generations model where agents vote on whether to open or close the economy to international capital flows. Political decisions are shaped by the risk over capital and labor returns. In an open economy, the capitalists (old) completely hedge their savings...