01744cas a2200241 a 4500 AALejournalIMF010523 230101c9999 xx r poo 0 0eng d 15.00 USD 9781451956771 1020-7635 BD-DhAAL BD-DhAAL International Monetary Fund. Research Dept. IMF Staff papers : Volume 35 No. 1. Washington, D.C. : International Monetary Fund, 1988. 1 online resource (228 pages) IMF Staff Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students A central proposition regarding effects of different mechanisms of fi-nancing public expenditures is that, under specific circumstances, it makes no difference to the level of aggregate demand if the government finances its outlays by debt or taxation. This so-called Ricardian equivalence states that, for a given expenditure path, substitution of debt for taxes does not affect private sector wealth and consumption. This paper provides a model illustrating the implications of Ricardian equivalence, surveys the litera-ture, considers effects of relaxing the basic assumptions, provides a frame-work to study implications of various extensions, and critically reviews recent empirical work on Ricardian equivalence. Mode of access: Internet IMF Staff Papers; IMF Staff Papers ; No. 1988/001 Full text available on IMF http://elibrary.imf.org/view/journals/024/1988/001/024.1988.issue-001-en.xml IMF e-Library