Ricardian equivalence

from Wikipedia, the free encyclopedia

The Ricardian equivalence or the Ricardian equivalence theorem (also Ricardo-Barro equivalence ) is based on a concept originally discussed by David Ricardo , according to which tax cuts do not prove to stimulate the economy if private economic agents do not use the amount of the lowered taxes for real economic expenditure, but save because they fear that the government's increased debt due to the tax cuts will later be compensated for in the form of tax increases. Ricardo himself rejected his concept again, ultimately rejecting its validity.

In 1974 Robert Barro took up the "Ricardian equivalence" and recognized it as the Barro-Ricardo equivalence proposition. It represents a neoclassical counter-position to the extent of the cyclical impact of Keynesian deficit spending . In practice, complete equivalence cannot be established.

criticism

Empirical studies show that the concept cannot be unreservedly valid, as, for example, the tax cut implemented in the USA in the early 1980s (→ Reaganomics ) did not lead to an increase in the savings rate , but to a reduction.

Individual evidence

  1. ^ David Ricardo: Essay on the Funding System , 1820.
  2. ↑ Tim Gemkow: The Ricardian Equivalence Theorem (PDF), p. 1.
  3. ^ Paul Krugman: International Economy. Theory and Politics of Foreign Trade. Munich 2009, p. 404 ( online on Google.Books ).
  4. ^ Robert Barro: Are Government Bonds Net Wealth? In: Journal of Political Economy, 1974.
  5. ↑ Meissner, Thomas & Rostam-Afschar, Davud (2014): Do tax cuts increase consumption? An experimental test of Ricardian Equivalence (PDF; 767 kB)
  6. ^ Paul Krugman: International Economy. Theory and Politics of Foreign Trade. Munich 2009, p. 404 ( online on Google.Books ).
  7. ↑ James M. Poterba , Lawrence H. Summers : Recent Evidence on Budget Deficits and National Savings. 1987, NBER Working Paper No. 2144; Excerpt from Finite lifetimes and the effects of budget deficits on national saving. 1987, Journal of Monetary Economics, Volume 20, Issue 2, pp. 369-391
  8. ↑ Leonardo Leiderman, Mario I. Blejer: Modeling and Testing Ricardian Equivalence: A Survey. 1988, Staff Papers ( International Monetary Fund ), Vol. 35, No. 1 (March, 1988), pp. 1-35
  9. ^ Rüdiger Dornbusch , Stanley Fischer : Macroeconomics , 1995, 6th edition, Oldenbourg Verlag, p. 717 ff, ISBN 3486228005
  10. ^ Victor Argy: International Macroeconomics: Theory and Policy. 1994, Routledge, p. 546, ISBN 978-0415098229
  11. ↑ Lawrence H. Summers , Christopher D. Carroll : Why is US National Saving so Low? 1987, Brookings Papers on Economic Activity, Vol. 1987, No. 2, pp. 607-642