Abstract
The role of debt finance and its bearing on future generations has been of longstanding concern to fiscal economists. Ricardo and Pigou in particular gave it their careful attention, advancing what may be called the classical doctrine of debt finance in a full-employment economy. The Keynesian model added a new perspective and the nature of debt burden once more became the subject of lively discussion during the 1960s.1 As seen in the modern perspective, debt policy not only poses issues of intergeneration equity but also of demand management and of fiscal discipline. Moreover, debt finance may serve to even out swings in tax rates, thereby reducing dead-weight loss over time. The difficulty lies in simultaneously satisfying these various considerations.
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References
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© 1988 International Economic Association
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Musgrave, R.A. (1988). Public Debt and Intergeneration Equity. In: Arrow, K.J., Boskin, M.J. (eds) The Economics of Public Debt. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-19459-9_5
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DOI: https://doi.org/10.1007/978-1-349-19459-9_5
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