Citation:

Jia Kang. "On the Misunderstanding Triggered by Ricardian Equivalence Theorem and the Optimization of the Public Debt Mechanism" International Research Journal of Economics and Management Studies, Vol. 3, No. 9, pp. 303-310, 2024.

Abstract:

The Ricardian Equivalence Theorem is a topic discussed from time to time in the academic circle. On the basis of academic review and the combing of research results, the paper discusses a series of important issues related to understanding the Ricardian Equivalence Theorem from an expanded perspective, points out the simple and crude characteristics of the Theorem, as more than 10 its related assumptions cannot be satisfied in the real world, and then explores the “non-equivalent” aspects recognized from six cognitions that should be expanded. This paper outlines the understanding of the practical rationality and non-substitutability of the public debt from the empirical dimension, clarifies the cognitive framework for the public debt scale effect curve, and then specifically discusses the five key points and suggestions for the optimization of the public debt management system and operating mechanism in China.

References:

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Keywords:

Ricardian Equivalence Theorem, public debt scale effect curve, mechanism optimization.