We model a two-party representative democracy with citizen-candidate in which the leader is elected while the central-banker is appointed by the leader. Assuming that fiscal policy is 'more important' than monetary policy, we show that, if some individuals who dislike inflation get organized in...

The incidence of public expenditure in education appears to be skewed in favour of the middle and upper classes. This paper inquires into the determinants of this bias using a political economy approach. We develop a model with two time periods with an election occurring between the two. In the...

In cases where policy makers accept "bribes" offered by organised lobbies or interested parties, government decisions can be modelled as a first price menu auction. In this paper we adapt this structure to model debt repudiation. We consider a one-period model in which two generations, parents...

This paper proposes a stylized two-period, two-country model illustrating the role of distribution of domestic wealth in determining a country's level of access to international lending. We model sovereign debt redemption policy in a common agency framework. Within this framework, policy is the...

We develop a two period model to investigate what makes the promise to repay public debt credible. We explor a political solution excluding any role for long-run reputational arguments. There are two sources of heterogeneity among individuals: wealth and income. Differences in asset holdings...

This paper proposes a stylized two-period two-country OLG model illustrating the potential role played by the nationality of investors on the incentives for a government to renege on its domestic debt. The two countries belong to a Monetary Union where monetary policy is decided by the...

This paper proposes a stylized two-period two-country model illustrating the role played by the distribution of domestic wealth in determining a country’s level of access to international lending. We model sovereign debt redemption policy as the outcome of the interaction between the...

In cases where policy makers accept "bribes" offered by organised lobbies or interested parties, the government decisions can be modelled as a first price menu auction. In this paper we adapt this structure to model debt repudiation. We consider a one-period model where two generations are...