Debt Default and Democracy: (New Thinking in Political Economy series)

The original essays in this book connect the microeconomic and macroeconomic approaches to public debt. Through their thought-provoking views, leading scholars offer insights into the incentives that individuals and governments may have in resorting to public debt, thereby promoting a clearer understanding of its economic consequences. The authors explore public debt along two distinct but complementary analytical paths. One path concerns microeconomic aspects of public debt as it emerges through budgetary processes where individuals respond to the costs and gains of different courses of action. The other concerns the systemic properties of rational individual acting within a democratic system of political economy. Within this scheme of thought, the two levels of analysis are integrated by recognition that efforts to control macro-level outcomes must address the micro-level circumstances and conditions that promote public debt as systemic budgetary outcomes. Scholars and students, as well as policy makers in public debt and political economy, will find this critical resource invaluable to understanding this vital issue. Contributors include: A. Alupoaiei, F. Balassone, G. Brennan, S. Cecchetti, M. Cecioni, M. Cioffi, W. Cornacchia, F. Corneli, F. Dragu, G. Eusepi, E. Longobardi, K. Mause, F. Neagu, A. Pedone, A. Rieck, L. Schuknecht, G. Semeraro, L. Voinea, R.E. Wagner

Table of Contents:
Contents: Preface PART I PUBLIC DEBT AND INDIVIDUAL RATIONALITY 1. De Viti de Marco vs. Ricardo on Public Debt: Self-Extinction or Default? Giuseppe Eusepi and Richard E. Wagner 2. Governing the Market for Sovereign Bailouts Karsten Mause 3. Political Obligations: Is Debt Special? Geoffrey Brennan 4. Debt Default and the Limits of the Contractual Imagination: Pareto and Mosca Meet Buchanan Richard E. Wagner PART II MACRO CONSEQUENCES AND IMPLICATIONS OF PUBLIC DEBT 5. Political economy of government solvency - the institutional framework for stability and sustainability Andrea Rieck and Ludger Schuknecht 6. On Some Recent Proposals of Public Debt Restructuring in the Eurozone Ernesto Longobardi and Antonio Pedone 7. Economic governance in the euro area: balancing risk reduction and risk sharing Fabrizio Balassone, Sara Cecchetti, Martina Cecioni, Marika Cioffi, Wanda Cornacchia, Flavia Corneli and Gabriele Semeraro 8. Adjustments in the balance sheets – is it normal, this “new normal”? Liviu Voinea, Alexie Alupoaiei, Florin Dragu and Florian Neagu Index

About the Author :
Edited by the late Giuseppe Eusepi, formerly Professor of Public Finance, Department of Law and Economics of Productive Activities, Sapienza University of Rome, Italy and Richard E. Wagner, Emeritus Professor of Economics, George Mason University, US