The dynamic political economy of intra-generational wage gap, borrowing constraints and public debt

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This research belongs to the growing literature on dynamic political economy. This research focuses on an intra-generational wage gap and borrowing constraints, and investigates the interaction between endogenous determination of the size of public debt, social security pension, redistribution policy and macroeconomic performance such as income inequality. As a result of analysis, I found that a change in the intra-generational wage gap or the borrowing constraints alter the voting behavior of agents, and let the size of public debt, social security pension and redistribution become estranged from an effective size in the equilibrium.