Heterogeneous dynasties and the political economy of public debt

We consider a small open overlapping generations economy with descending al truism. Heterogeneity is introduced by assuming that each parent procreates a fixed proportion of selfish children. Altruistic parents can recognize t he type of each child. There is no Ricardian equivalence and an active publ ic intergenerational transfer policy is attractive to altruistic dynasty me mbers, although there may be no unanimity among them. We display reasonable conditions for indirect preferences to be single-peaked and we apply the m edian voter theorem. We then describe political equilibrium paths and discu ss their compatibility with the steady path of an underlying closed economy with autonomous labor productivity growth.