Ricardian equivalence for local government bonds: A utility maximization approach

John William Hatfield

Economics Letters, 2010, vol. 107, issue 2, 148-151

Abstract: We show that Ricardian equivalence holds for local public finance if and only if subnational units use property taxes. However, for other tax bases, the unique equilibrium has the same economic outcome as in models where districts may not issue debt.

Keywords: Ricardian; equivalence; Federalism (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:107:y:2010:i:2:p:148-151

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