Article
Ricardian Equivalence: Further Evidence
INTERNATIONAL ECONOMIC JOURNAL
(1996)
Abstract
The Ricardian Hypothesis states that for a given level of government expenditure, aggregate demand is neutral to changes in the debt-to-tax ratio. Many economists argue that the private and government sectors have different planning horizons which will lead to deviations from Ricardian equivalence. In this paper, by using a model that nests both Ricardian equivalence and an alternative hypothesis, we empirically investigate whether the private sector has a shorter planning horizon than the government sector. The evidence presented in this study suggests that there is no difference between the planning horizons of the private and government sectors.
Disciplines
Publication Date
1996
Citation Information
Atreya Chakraborty. "Ricardian Equivalence: Further Evidence" INTERNATIONAL ECONOMIC JOURNAL Vol. 10 Iss. 3 (1996) Available at: http://works.bepress.com/atreya_chakraborty/25/