 De Viti de Marco vs. Ricardo on public debt: self-extinction or default?Giuseppe Eusepi and Richard E. Wagner Chapter 1 in Debt Default and Democracy, 2018, pp 3-16 from Edward Elgar Publishing Abstract: Antonio de Viti de Marco, accepted David Ricardo’s proposition that an extraordinary tax and a public loan are equivalent. All the same, de Viti’s theory of public debt diverged sharply from Ricardo’s. Ricardo thought effectively in representative agent terms; De Viti did not, and thought instead of macro variables as emerging out of interaction among individuals. Ricardo’s macro framework entailed the self-extinction of public debt due to its representative agent quality. In contrast, de Viti’s micro framework explained that self-extinction depended on the operating properties of the political system in which public debt was generated. Within the theoretical extremum of a system of cooperative democracy, self-extinction was a likely property. Ordinary democratic systems, however, featured continuing competition among elites striving for power. This competition enabled politically dominant groups to pass cost onto others in society, bringing about a de facto form of debt default and not self-extinction. Keywords: Economics and Finance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:18261_1 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Chapters from Edward Elgar Publishing |
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