6533b7d8fe1ef96bd126999b
RESEARCH PRODUCT
How to pay for the war in times of imperfect commitment. Adam Smith and David Ricardo on the Sinking Fund
Rodolfo Signorinosubject
Macroeconomics060106 history of social sciencesGeneral Arts and HumanitiesKeynesian economics05 social sciencesEconomics Econometrics and Finance (miscellaneous)Public expenditure06 humanities and the artsDebt repaymentAdam smithAdam Smith David Ricardo Ricardian equivalence sinking fund imperfect commitmentSpanish Civil WarIncentiveHistory and Philosophy of ScienceSettore SECS-P/04 - Storia Del Pensiero Economico0502 economics and businessEconomics0601 history and archaeologySinking fundImperfect050207 economicsSettore SECS-P/01 - Economia Politicadescription
AbstractThe paper proposes a comparative analysis of Smith's and Ricardo's views on the sinking fund. It shows that Smith and Ricardo agreed in stressing the ineffectiveness of the sinking fund as a policy instrument targeted at public debt repayment and tax-burden relief, pointing out that its actual workings had paradoxically helped to increase rather than reduce British total debt-load. Moreover, their explanation of the sinking fund paradox integrates a defective fiscal commitment technology with powerful politicians’ incentives to siphon off the money stored in the sinking fund to meet sudden increases of public expenditure whenever the occasion arose.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2014-11-24 |