Are Government Bonds Net Wealth?¶
Barro, R. J. (1974). Are Government Bonds Net Wealth?. Journal of Political Economy, 82(6), 1095-1117.
Cited by¶
1 citation across 1 artifact.
Primes¶
- Anticipatory Neutralization
- Ricardian equivalence holds that households anticipating future taxes to service current debt save more today, neutralising the demand stimulus of deficit-financed spending.
Supported in partVerified against the publisher's abstract
Barro's abstract states bonds count as net wealth only if their value exceeds the capitalized future tax stream, and that "expansionary" demand effects hinge on this - the frame of the claim, not its household-saving mechanism.
“In particular, the standard effects of "expansionary" fiscal policy on aggregate demand hinge on this assumption. Government bonds will be perceived as net wealth only if their value exceeds the capitalized value of the implied stream of future tax liabilities.”
- Ricardian equivalence holds that households anticipating future taxes to service current debt save more today, neutralising the demand stimulus of deficit-financed spending.
Verification¶
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