The issue they have in common is whether or not additional fiscal expenditure will exert positive effects on the way people form their positive expectations in a sustainable manner. Households do not act as rationally as Ricardian equivalence assumes.
In this country, for example, net income inequality has been on an upward trend since the late 1970s.1 Although globalisation might have amplified growing income inequality, empirical analysis tends to suggest that technological progress, and the associated rise in demand for skilled labour over low-skilled, is likely to explain most of the rise in income inequality in advanced economies since the early 1980s.2 And yet, fears of globalisation appear to dominate public discussion and are likely to have been a key factor in fomenting political opposition to the free movement of goods, services, capital, and people.