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Public Debt, Fiscal Solvency and Macroeconomic uncertainty in Latin America: The cases of Brazil, Colombia, Costa Rica and Mexico

Ratios of public debt as a share of GDP in Brazil, Colombia, and Mexico were 10 percentage pointshigher on average during 1996-2002 than in the period 1990-1995. Costa Rica’s debt ratio remainedstable but at a high level near 50 percent. Is there reason to be concerned for the solvency of the public sector in these…

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Α POSITIVE THEORY OF FISCAL DEFICITS AND GOVERNMENTDEBT IN A DEMOCRACY

This paper considers an economy in which policyniakers with different preferences concerning fiscal policy alternate in office as a result of democratic elections. It is shown that in this situation government debt becomes a strategic variable used by each policymakerto influence the choices of his successors. In particular, if different policymakers disagree aboutthe desired composition…

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The Positive Political Economy of Public Debt:An Empirical Examination of the OECD Postwar Experience

Theoretical literature seeking to explain public-debt accumulation exploded in recentyears as debt crises emerged in many nations. Empirical evaluation of political-economy theorieshas, sadly, lagged that of the standard tax-smoothing/economic-conditions model (0). This paper joins recent work beginning to redress that imbalance, operationalizing and testing nine positive- political-economy-of-public-debt theories, several for the first time. Theories regarding…

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