Barsky, Robert B.; Mankiw, N. Gregory; Zeldes, Stephen P. - National Bureau of Economic Research (NBER) - 1987
In this paper, we examine Ricardian equivalence of debt and tax finance in a world in which taxes are not lump-sum but are levied on risky labor income. First, we show that the marginal propensity to consume out of a tax cut, coupled with a future income tax increase, is positive under...