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PUBLIC DEBT, INTEREST AND FISCAL INCIDENCE
Author(s) -
Hammes David L.,
Wills Douglas T.
Publication year - 1987
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1987.tb00685.x
Subject(s) - debt , citation , sociology , history , library science , law , economics , political science , computer science , finance
Studies of fiscal incidence abound.' Feeding this growing literature has been the challenge to the orthodox view that central governments can and do undertake taxation and expenditure programs that make the distribution of income "more equal." As such, incidence studies are seen to be of more immediate and practical policy relevence than many other areas of economic research. It would be unfair, indeed unwise, to assert that there is unanimity in the approaches taken and the results achieved to date. One recent contribution even carries the rather nihilistic title asking "Do Empirical Studies of Budget Incidence Make Sense?" There is, in short, a great demand by policy makers and evaluators for results which are considered by some academic researchers to be less than r~bust.~ It is our purpose to sharpen the focus on the treatment of one particular and fast growing component of government expenditures, interest paid on the national debt. We do this for two reasons: first, interest payments as a proportion of total federal government expenditures have risen dramatically across countries in this de~ade;~ secondly, there is little explicit consideration, at a theoretical level, of their treatment. As a result, in practice, some researchers (Gillespie, 1980) include and distribute them as current expenditures while others (Ruggles and O'Higgins, 1981a and 1981b) do not.