[Seminar 11/02] Joachim Weimann (U of Magdeburg, Germany)
Speaker：Professor Joachim Weimann (University of Magdeburg, Germany)
Title: The Two Sides of Public Debt: Intergenerational Altruism and Burden Shifting
Date: 11/02, 14:30-16:00, 位育楼117
Host: 南审社会与经济研究院 (ISER) 和 经济与金融研究院 (IEF)
In controlled laboratory experiments with and without overlapping generations, we study the role of intergenerational altruism in public debt accumulation. Public debt is chosen by popular vote, pays for public goods, and is repaid with general taxes. We use an optimal control model to derive a theoretical benchmark. With a single generation, public debt is accumulated prudently. With multiple and overlapping generations, the burden of debt and the risk of over-indebtedness are shifted to future generations. We find a weak but significant sign of intergenerational altruism, observing that the revealed debt preferences increase as the number of following generations decreases. However, we find considerably fewer intergenerational fairness concerns than one would expect on the basis of the behavioral and experimental literature. Instead, political debt cycles that vary with voters’ age emerge. Debt ceiling mechanisms fail to encourage intergenerational altruism and do not mitigate the problem of burden shifting.
Brief introduction of the speaker:
Joachim Weimann holds the chair for economics and economic policy at the University of Magdeburg in Germany. He is head of the Magdeburg laboratory for experimental economic research (MaXLab). He is chairman of the German society of experimental economics and member of the Senate of the German Science Foundation. His research focuses on individual decision-making, environmental economics, and the labor market. He has published many papers in leading field journals and is the author of “Measuring Happiness, The Economics Of Well-Being” (with A. Knabe und R. Schöb, MIT-Press, 2015) among several other books. Professor Weimann takes an active part in the political debate in Germany and has several times been in "The 50 most influential economists in Germany" selection of the Frankfurter Allgemeine Zeitung (one of the leading German newspapers).