Ricardian equivalence is often attributed to David Ricardo and more attributed to
A) Gerald O'Driscoll.
B) Adam Smith.
C) Milton Friedman.
D) Robert Barro.
E) Robert Lucas.

Question

Quizplus · Accepted Answer

Ricardian equivalence is a theory developed by Robert Barro, an American macroeconomist. The theory suggests that government deficits are essentially irrelevant for public finance, as individuals will save the extra money that they receive via tax cuts or government transfers, expecting an eventual tax increase in the future to pay for the deficit. Barro named the theory after David Ricardo, an 18th-century economist who discussed a similar idea in his work on public debt. However, it was Barro who developed and formalized the theory in the context of modern economic models, so the credit goes to him.

Ricardian Equivalence Is Often Attributed to David Ricardo and More