Sentences with phrase «ricardian equivalence»

Andreoni, J.: 1989, Giving with impure altruism: Applications to charity and ricardian equivalence, Journal of Political Economy 97, 1447 — 1458.

It is the corollary of Ricardian equivalence (i.e. the existence of a deficit deters increases in private consumption because consumers anticipate spending cuts / revenue increases in order to bring down the deficit, thus curtailing their propensity and ability to spend privately).

There is quite a strong argument that in spite of its deployment as a form of monetary inflation QE was empirically deflationary via numerous channels: by encouraging cash hoarding by savers in the absence of adequate income; by skewing wealth and income towards those most likely to hoard it; by an inter-temporal Ricardian equivalence; in your own Austrian terms by driving excess investment to the upper reaches of the production structure, creating excess capacity and malinvestment; by skewing the incentives of company directors towards short - term speculation; by perpetuating the survival of zombie entities; by encouraging investment in unproductive assets.

If we are believers in Ricardian equivalence, delaying tax hikes alone should make very little difference — the combination of reflation (and implied fiscal tightening of inflating away debt) makes Abe's near - term growth commitment more meaningful.

We can see it with a hypothesis called Ricardian equivalence.