PTP #8

From Jack Hirshleifer

During World War II it was necessary to decide how much of military expenditures was to be financed by taxation and how much by government borrowing. Some economists argued that financing the war by borrowing would “shift the burden to future generations.” Is this correct? How would you go about determining how much of the cost of a war is borne by the current generation versus future generations?

Source: Jack Hirshleifer, Amihai Glazer, and David Hirshleifer, Price Theory and Applications, 7th ed. (Cambridge University Press, 2005), p. 493

Topics: public-finance , government-debt , intergenerational-effects , taxation