Author: Faik BilgiliPublisher:
ISBN:
Category :
Languages : en
Pages : 90
Book Description
Testing the Ricardian Equivalence Theorem in the Framework of the Permanent Income Hypothesis
Author: Faik BilgiliTesting Ricardian Equivalence Through Verification of the Permanent Income Hypothesis
Author: Wansup KimPublisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 0
Book Description
Ricardian Equivalence and the Permanent Income Hypothesis
Author: Benoît PerronPublisher:
ISBN:
Category : Budget deficits
Languages : en
Pages : 22
Book Description
The Simplest Possible Presentation of the Life Cycle-Permanent Income Hypothesis and Ricardian Equivalence
Author: Sheldon H. SteinPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
In this paper, a set of simple numerical examples are used to illustrate the essence of the life cycle-permanent income hypothesis and Ricardian equivalence. The level of mathematical sophistication required of the reader is nothing more than grade school arithmetic. Since the simple Keynesian absolute income theory of consumption requires nothing more than elementary school mathematical competence, the playing field of the various theories is leveled for the novice reader.
IMF Staff papers
Author: International Monetary Fund. Research Dept.Publisher: International Monetary Fund
ISBN: 1451956770
Category : Business & Economics
Languages : en
Pages : 228
Book Description
A central proposition regarding effects of different mechanisms of fi-nancing public expenditures is that, under specific circumstances, it makes no difference to the level of aggregate demand if the government finances its outlays by debt or taxation. This so-called Ricardian equivalence states that, for a given expenditure path, substitution of debt for taxes does not affect private sector wealth and consumption. This paper provides a model illustrating the implications of Ricardian equivalence, surveys the litera-ture, considers effects of relaxing the basic assumptions, provides a frame-work to study implications of various extensions, and critically reviews recent empirical work on Ricardian equivalence.
A Reappraisal of Recent Tests of the Permanent Income Hypothesis
Author: Charles R. NelsonPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Hall (1978) showed that the permanent income hypothesis implies that consumption (1) follows a random walk, and (2) cannot be predicted by past income. Reexamination of Hall's data results in rejection of the random walk hypothesis in favor of the alternative hypothesis of positively autocorrelated changes. Evidently this is due to Hall's choice of a quadratic utility function. A logrithmic utility function implies a random walk in the log of consumption which is supported by the data. Hall reported that past income had a negative but insignificant relation to consumption. Changes in the log of income, however, do have a positive predictive relation to changes in the log of consumption. The adjustment of consumption to income seems to be spread over two quarters. Flavin's (1981) test of the theory is formally equivalent to Hall's except for assuming stationarity around a time trend. Mankiw and Shapiro (1984) have pointed out that the effect of detrending may be to tend to rejection of the theory when it is in fact correct. For Hall's data the effect of detrending is to reverse the sign of the coefficient on past income. Its magnitude is what the Mankiw-Shapiro analysis predicts under the permanent income hypothesis
Michigan Journal of Economics
Author: Publisher: UM Libraries
ISBN:
Category : Economics
Languages : en
Pages : 370
Book Description
Weekly Weather and Crop Bulletin
Author: Dissertation Abstracts International
Author: Publisher:
ISBN:
Category : Dissertations, Academic
Languages : en
Pages : 700
Book Description
The Effectiveness of Fiscal Policy in Stimulating Economic Activity
Author: Richard HemmingPublisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 62
Book Description
This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.