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Economists are widely familiar with the Ricardian equivalence thesis. It maintains that, given the time-path of government spending, a change in taxation does not alter the set of feasible life-time consumption plans of the households and affects neither the demand for commodities and services...
Persistent link: https://www.econbiz.de/10011210873
This note identifies a severe mistake in my article “Unexpected Consequences of Ricardian Expectations” that appeard in this journal in the July 2013 issue.
Persistent link: https://www.econbiz.de/10011210881
Economists are widely familiar with the Ricardian equivalence thesis. It maintains that, given the time-path of government spending, a change in taxation does not alter the set of feasible life-time consumption plans of the households and affects neither the demand for commodities and services...
Persistent link: https://www.econbiz.de/10011210888
This note generalizes Feldstein’s (1976) criticism of Barro’s(1974) analysis for the case that the interest rate exceeds the growth rate. This is done by considering an economy in steady state where all agents hold “Barro expectations”: they believe that government debt must necessarily...
Persistent link: https://www.econbiz.de/10009493831
Government bonds are interest-bearing assets. Increasing public debt increases income, wealth, and consumption demand. The smaller government expenditure is, the larger consumption demand must be in equilibrium, and the larger must be public debt. Conversely, lower public debt implies higher...
Persistent link: https://www.econbiz.de/10005009878
Government bonds are interest-bearing assets. Increasing public debt increases income, wealth, and consumption demand. The smaller government expenditure is, the larger consumption demand must be in equilibrium, and the larger must be public debt. Conversely, lower public debt implies higher...
Persistent link: https://www.econbiz.de/10005009879