Consequences of Debt Capitalization: Property Ownership and Debt/Tax Choice

Conference object, Preprint OPEN
Eichenberger, Reiner; Stadelmann, David;
  • Publisher: Verein für Socialpolitik Frankfurt a. M.
  • Subject: Public Debts | H74 | Homeownership | Public Debts; Homeownership; Taxes; Ricardian Equivalence | H00 | Taxes | Ricardian Equivalence | R51
    • jel: jel:H00 | jel:H74 | jel:R51
      ddc: ddc:330

Public debts capitalize into property prices. Therefore, property owners tend to favor tax over debt financing for government spending. In contrast, tenants do not suffer from debt capitalization. Thus, they tend to favor debt over tax financing. Our model of the result... View more
  • References (28)
    28 references, page 1 of 3

    Alesina, A. & Drazen, A. (1991): „Why are Stabilizations Delayed?“, American Economic Review, Vol. 81, p. 1170-1188.

    Alesina, A. & Perotti, R. (1994): „The Political Economy of Budget Deficits“, NBER Working Papers No. 4637.

    Ashworth, J.; Geys, B. & Heyndels, B. (2005): „Government Weakness and Local Public Debt Development in Flemish Municipalities“, International Tax and Public Finance, Vol. 12, p. 395-422.

    Banzhaf, H. S. & Oates, W. E. (2008): „On Ricardian Equivalence in Local Public Finance“, Available at SSRN:

    Barro, R. J. (1974): „Are Government Bonds Net Wealth?“, Journal of Political Economy, Vol. 82, p. 1095-1117.

    Barro, R. J. (1989): „The Ricardian Approach to Budget Deficits“, Journal of Economic Perspectives, Vol. 3, p. 37-54.

    Dafflon, B. (2006). Real property management in the Swiss communes. In O. Kaganova and J. McKellar (Eds.), Managing Government Property Assets: International Experiences, pp. 201-230. Urban Institute Press, Washington.

    Drazen, A. & Grilli, V. (1993): „The Benefit of Crises for Economic Reforms“, American Economic Review, Vol. 83, p. 598-607.

    Eichenberger, R. & Schelker, M. (2007): „Independent and competing agencies: An effective way to control government“, Public Choice, Vol. 130, p. 79-98.

    Feld, L. P. & Kirchgässner, G. (2001): „Does Direct Democracy Reduce Public Debt Evidence from Swiss Municipalities“, Public Choice, Vol. 109, p. 347-370.

  • Metrics
Share - Bookmark