Coordinating intergenerational redistribution and the repayment of public debt: an experimental test of Tabellini (1991)

Is there a link between public debt and wealth inequality? Could government bondholders use intra-generational redistribution strategically to make the repayment of debt politically viable? We reconsider the model of Tabellini (J Polit Econ 99:335–357, 1991) and expose the role of coordination and divide-and-conquer . By coordinating their bond investments, the old generation splits up the young generation and secures a majority favoring debt...