Speakur

Word Pronunciation & Dictionary

ricardian equivalence

Word Rarity Very rare

Frequency: Zipf frequency 1.63 in modern English

Syllables
ri-car-dian e-quiv-a-lence
IPA
37
Scrabble Score
20
Letters
6
Syllables
11
Unique Chars

Meaning

noun

The idea that consumers are forward-looking and so internalize the government's budget constraint when making their consumption decisions, so that, for a given pattern of government spending, the method of financing such spending does not affect agents' consumption decisions, and thus does not change aggregate demand.

Uncountable

Etymology

Proposed by economist David Ricardo in the early 19th century.

Usage

Questions

What does ricardian equivalence mean?
The idea that consumers are forward-looking and so internalize the government's budget constraint when making their consumption decisions, so that, for a given pattern of government spending, the method of financing such spending does not affect agents' consumption decisions, and thus does not change aggregate demand.
Where does ricardian equivalence come from?
Proposed by economist David Ricardo in the early 19th century.

How to pronounce ricardian equivalence

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