Ricardian equivalence in the presence of capital market imperfections

Toshiki Yotsuzuka*

*この研究の対応する著者

研究成果: Article査読

31 被引用数 (Scopus)

抄録

It is a common claim that Ricardian equivalence fails if capital markets are imperfect. The validity of this claim is examined for the case of informationally imperfect capital markets. We present three alternative models of adverse selection and analyze the effects of debt finance in these models. It is shown that a debt-financed tax cut can lead to Pareto improvement in some cases. In the theoretically most preferable model, however, Ricardian equivalence survives in spite of genuine imperfections in the capital market. The results point to the importance of specifying the exact nature of imperfection.

本文言語English
ページ(範囲)411-436
ページ数26
ジャーナルJournal of Monetary Economics
20
2
DOI
出版ステータスPublished - 1987 9
外部発表はい

ASJC Scopus subject areas

  • 財務
  • 経済学、計量経済学

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