Traditional Culture Encyclopedia - Traditional virtues - What is Ricardo's equivalence theorem? What are the prerequisites?
What is Ricardo's equivalence theorem? What are the prerequisites?
It refers to the choice of government revenue form, which will not cause the adjustment of people's economic behavior. That is, whether the government chooses to levy a one-time tax or issue national debt to raise funds for government expenditure. Neither household consumption nor capital generation will be affected. Ricardo pointed out: "If 20 million pounds is collected as a year's war expense by issuing bonds, it means that 20 million pounds will be taken out of the country's production capital, and 6.5438+million pounds will be collected every year to pay the interest on such bonds, but those who pay 6.5438+million pounds will be transferred to those who accept 6.5438+million pounds. What is actually spent is this 20 million pounds, not the interest that this 20 million pounds must pay. Paying interest or not will not make the country rich or poor. The government can collect 20 million pounds at a time through taxation; In this case, there is no need to levy 6,543,800+0,000 pounds a year. But doing so will not change the nature of this problem. "
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