Abstract
Classical principles of public debt limited debt financing to non-recurrent, extraordinary or temporary demands. Keynesian macroeconomics, viewing budget deficits as the only means of financing demand-increasing deficits during depressions, overlooked the exchange between government and lenders in debt-financed public expenditure. In the post-Keynesian 1970s and 1980s, governments explicitly used debt to finance ordinary public consumption, including transfers, which was equivalent to a destruction in national capital value and raised the prospect of default. Fiscal responsibility demands that the classical principles of public debt must eventually return to general acceptance.
Keywords
- Assets and liabilities
- Barro, R.
- Buchanan, J. M.
- Budget deficits
- Capital value
- Default
- Fiscal responsibility
- Keynesian revolution
- Neutrality theorem
- New classical macroeconomics
- Public debt
- Ricardian equivalence theorem
- Ricardo, D.
- Taxation
JEL Classifications
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsBibliography
Adams, H.C. 1893. Public debts. New York: Appleton.
Barro, R.J. 1974. Are government bonds net wealth? Journal of Political Economy 82: 1095–1117.
Bastable, C.F. 1895. Public finance. 2nd ed. London: Macmillan.
Buchanan, J.M. 1958. Public principles of public debt. Homewood: Richard D. Irwin.
Buchanan, J.M., and R.E. Wagner. 1977. Democracy in deficit. New York: Academic.
Ferguson, J.M., ed. 1964. Public debt and future generations. Chapel Hill: University of North Carolina Press.
Harris, S.E. 1947. The national debt and the new economics. New York: McGrawHill.
Lerner, A.P. 1948. The burden of the national debt. In Income, employment, and public policy: Essays in honor of Alvin H, 255–275. Hansen: Norton.
Leroy-Beaulieu, P. 1912. Traité de la science des finances. Vol. 2: Le budget et le crédit public. 8th ed. Paris: Alcan.
Ricardo, D. 1817, 1820. Works and correspondence, ed. P. Sraffa, vol. 1, vol. 4. Cambridge: Cambridge University Press for the Royal Economic Society, 1951.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Buchanan, J.M. (2018). Public Debt. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1883
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_1883
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences