Corpus ID: 11954586

A Political Theory of Government Debt and Deficits in a Neo-Ricardian Framework

@article{Cukierman1989APT,
  title={A Political Theory of Government Debt and Deficits in a Neo-Ricardian Framework},
  author={A. Cukierman and A. Meltzer},
  journal={The American Economic Review},
  year={1989},
  volume={79},
  pages={713-732}
}
  • A. Cukierman, A. Meltzer
  • Published 1989
  • Economics
  • The American Economic Review
  • In the presence of different abilities, and therefore different bequests, some individuals are bequest constrained even in a neo-Ricardian world. Such individuals vote for taxes on future generations, through the issuance of bonds, thereby increasing their current consumption. This produces some crowding out of capital, reduces wage rates, and increases the interest rate. As a consequence, even unconstrained individuals are no longer indifferent to the size of government debt. The paper derives… CONTINUE READING
    322 Citations

    Figures from this paper

    Intergenerational Politics, Government Debt and Economic Growth
    • 3
    • PDF
    Redistributive Politics and Government Debt in a Borrowing�?Constrained Economy
    • Highly Influenced
    • PDF
    Defense Spending in a Neo-Ricardian World
    • 11
    PUBLIC DEBT IN A POLITICAL ECONOMY
    • 6
    The Political Power of the Owners of Public Debt
    • PDF
    On the Political Economy of Deficit Bias and Immigration
    • 2
    • PDF

    References

    SHOWING 1-10 OF 17 REFERENCES
    Government Debt, Human Capital, and Bequests in a Life-Cycle Model
    • 154
    Perceived Wealth in Bonds and Social Security: A Comment
    • 153
    A Rational Theory of the Size of Government
    • 4,217
    • PDF
    Are Government Bonds Net Wealth?
    • R. Barro
    • Economics
    • Journal of Political Economy
    • 1974
    • 5,274
    • PDF
    Money, in disequilibrium
    • 51