This paper analyzes the implications of a gradual increase in the frequency of climatic disasters for public debt sustainability and sovereign default risk. I develop a simple stochastic model of sovereign default that allows for time-varying probability of climatic disasters. I show that the...

This paper analyzes the political economy of government debt when elected politicians decide about the distribution of public funds between a clean and a polluting public good. When provision of the polluting good creates a stock of climate externalities, strategic incentives for the incumbent...