Credibility and Public Debt Management

Rogers [Ill] discusses how distributional concerns may limit the government's ex post temptation to tax capital, as do Hillier and Malcolmson [76]. Rotemberg [119] outlines a distributional argument for why government debt will be honored and not repudiated. Alesina and Tabellini [12] consider distributional incentives in a paper about equilibrium tax policy, external debt and capital flight.