Eric Lonergan — Ricardian equivalence: another reason why fiscal policy works

Sometimes the obvious is hard to perceive. Debate about “Ricardian equivalence” may be missing the obvious: forward-looking, ‘rational’ households should expect fiscal policy to work, and their future incomes to be higher. A Ricardian perspective is therefore supportive of counter-cyclical fiscal policy.

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Ricardian equivalence: another reason why fiscal policy works
Eric Lonergan