Gioacchino, Debora Di; Ginebri, Sergio; Sabani, Laura - In: Rivista di Politica Economica 93 (2003) 1, pp. 79-118
We develop a two period model to investigate what makes the promise to repay public debt credible. We explore 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...