The ‘Hidden’ Debt

1. Introduction.- 2. Notes on a Definition of the Concept of Public Debt.- 2.1 Introduction.- 2.2 Analogies between borrowing and unfunded obligations.- 2.3 Differences between borrowing and unfunded obligations.- 2.4 The U.K. pension system case.- 2.5 Economic and policy implications.- Notes.- 3. The Public Debt Perception Issue.- 3.1 Introduction.- 3.2 Public debt illusion: a brief overview.- 3.3 Funded debt perception.- 3.4 Unfunded debt perception.- 3.5 Concluding remarks.- Notes.- 4. The Fulfilment of Unfunded Obligations and the Problem of Population Growth: An Application of Baumol’s Law.- 4.1 Introduction.- 4.2 The model.- 4.3 Concluding remarks.- Notes.- 5. Public Choice Implications of Unfunded Debt.- 5.1 Introduction.- 5.2 The median voter theorem and unfunded obligations.- 5.3 Unfunded obligations fulfilment within a median voter framework: a simple model.- 5.4 The effects of the population growth on the level of unfunded obligations fulfillment.- 5.5 The choice of the median voter’s optimum contribution rate.- 5.6 Concluding remarks.- Notes.- 6. The Interest Group Theory and Unfunded Obligations.- 6.1 Introduction.- 6.2 Interest groups and the political process.- 6.3 Interest groups and unfunded obligations.- 6.4 Concluding remarks.- Notes.- 7. An Attempt at Empirical Investigation.- 7.1 Introduction.- 7.2 Some preliminary methodological questions.- 7.3 The pension equation: cross-section analysis.- 7.4 The pension equation: time-series analysis.- 7.5 OLS results.- 7.6 Concluding remarks.- Notes.- 8. Conclusions.