Beetsma, Roel M. W. J.; Sloof, Randolph; Steinweg, Alina - 2023
Motivated by the recent debate about the EU fiscal framework, we analyse public debt ceilings in a political-economy model with uncertainty about both the type of policymaker (benevolent or selfish) and the state of the economy (good or bad). Pooling, hybrid and separating equilibria may exist....