# Ricardian Equivalence

*Macro & Economy — Finicade finance glossary*

The theory that people see today's deficit as tomorrow's tax bill, so they save the windfall and government stimulus has no effect. A useful benchmark that rarely holds fully in practice.

**Related terms:** [Fiscal Policy](https://finicade.com/glossary/fiscal-policy), [Paradox of Thrift](https://finicade.com/glossary/paradox-of-saving), [Government Debt](https://finicade.com/glossary/government-debt)

**Taught in:** Macro & Markets — Fiscal Policy & the Government Debt

Source: https://finicade.com/glossary/ricardian-equivalence