Elucidation of the decision mechanism of public debt policy through a political process

2017 Fiscal Year Final Research Report

• Project/Area Number: 15K17078
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Public finance/Public economy
• Research Institution: Kochi University of Technology
• Principal Investigator: Arai Real 高知工科大学, 経済・マネジメント学群, 講師 (70590462)
• Project Period (FY): 2015-04-01 – 2018-03-31
• Keywords: 公債 / 財政再建 / 投票 / 政治過程 / マクロ経済

Outline of Final Research Achievements

Taking into account the fiscal consolidation process, I build a model to analyze decision of a public debt policy through a political process. I investigate an effect of a change in political power of older generation (or younger generation) on the determination of the public debt policy, including the sovereign default. In the extent of my quantitative analysis, when the political power of older generations increases, we obtain a result that sovereign default is likely not to occur.
In addition, related to model analysis on voters' behavior on public debt holding, we tackle empirical study by using the JGSS data. We show that, the higher the age of voters, the higher the proportion of voters who prefers in the consumption tax increase is. We promote discussion about the mechanism.

Free Research Field

財政学，マクロ経済学