An investigation of Ricardian equivalence in a common trends model

• 成果类型: Article
• 署名作者: Becker, T
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(97)00023-8
• 发表日期: 1997
• 页码: 405-431
• 关键词: public debt; private consumption; sustainability; cointegration

摘要

To empirically discriminate between Ricardian and non-Ricardian behaviour, we have to use a method that distinguishes between expected and unexpected, as well as permanent and transitory changes in taxes and government consumption. One method that provides these distinctions between different types of changes is the common trends framework used in this paper, which is a VAR model with cointegrating constraints. In the empirical study of US data, there is some support for the Ricardian hypothesis, but there are also some deviations from its predictions. However, the differences do not lend support to a Keynesian view of budget deficits, but rather to the view of expansionary fiscal contractions. This can be motivated theoretically by uncertainty about future taxes in combination with prudent households.