How to pay for the war in times of imperfect commitment. Adam Smith and David Ricardo on the Sinking Fund

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4 Citazioni (Scopus)

Abstract

The paper proposes a comparative analysis of Smith’s and Ricardo’s views on the sinking fund. It shows that Smith and Ricardo agreed in stressing the ineffectiveness of the sinking fund as a policy instrument targeted at public debt repayment and tax-burden relief, pointing out that its actual workings had paradoxically helped to increase rather than reduce British total debt-load. Moreover, their explanation of the sinking fund paradox integrates a defective fiscal commitment technology with powerful politicians’ incentives to siphon off the money stored in the sinking fund to meet sudden increases of public expenditure whenever the occasion arose.
Lingua originaleEnglish
pagine (da-a)544-560
Numero di pagine17
RivistaEUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT
Volume23
Stato di pubblicazionePublished - 2016

All Science Journal Classification (ASJC) codes

  • ???subjectarea.asjc.1200.1200???
  • Economics, Econometrics and Finance (miscellaneous)
  • History and Philosophy of Science

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