Titlebar

Export bibliographic data
Literature by the same author
plus on the publication server
plus at Google Scholar

 

How Federalism Protects Future Generations from Today's Public Debts

Title data

Eichenberger, Reiner ; Stadelmann, David:
How Federalism Protects Future Generations from Today's Public Debts.
In: Review of Law & Economics. Vol. 6 (2010) Issue 3 . - pp. 395-420.
ISSN 1555-5879
DOI: https://doi.org/10.2202/1555-5879.1539

Abstract in another language

From the politico-economic perspective, federalism is a protector of the present generation. But what about future generations? In federal states, Ricardian equivalence cannot be assumed to work properly, as migration between local jurisdictions undermines intergenerational redistribution based on parental altruism. However, we argue that there exists another equivalence mechanism which also works with purely selfish individuals: Public debts capitalize into property values. Jurisdictions with larger net debts exhibit, ceteris paribus, lower property prices. Debt capitalization in property values is the more pronounced the less elastic land supply is and the more mobile the other factors of production are. Therefore, capitalization is more relevant for local than for national debts, i.e. it is more pronounced in a federal than in a centralized state. Thus, federalism also becomes a protector of future generations.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Federalism; debt; generational accounting
Institutions of the University: Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Professorship Development Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Professorship Development Economics > Professorship Development Economics - Univ.-Prof. Dr. David Stadelmann
Profile Fields > Emerging Fields > Governance and Responsibility
Profile Fields
Profile Fields > Emerging Fields
Result of work at the UBT: No
DDC Subjects: 300 Social sciences > 320 Political science
300 Social sciences > 330 Economics
Date Deposited: 01 Dec 2014 07:37
Last Modified: 26 Apr 2018 06:28
URI: https://eref.uni-bayreuth.de/id/eprint/3292