Reflections on Ricardian Equivalence

Robert J. Barro

NBER Working Paper No. 5502
Issued in March 1996
NBER Program(s):   EFG   PE

The Ricardian equivalence proposition for public debt in my 1974 JPE paper is related to the discussions in Ricardo's Funding System, Smith's Wealth of Nations, and a number of treatments in macroeconomics from the 1950s to the 1970s. Useful extensions of the basic invariance proposition involve tax smoothing (in the context of distorting taxation) and the determinants of the maturity and other characteristics of the debt structure (in an environment of uncertainty).

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Published: Maloney, J. (ed.) Debt and Deficits: An Historical Perspective. Edward Elgar, 1998.

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