Ghassan, Hassan B. (): Test de l’équivalence Ricardienne par la Modélisation SVAR. Published in: Revue de l’Institut National de. Emmanuel Thibault, “L’Equivalence Ricardienne dans les Modèles de Croissance avec Accumulation du Capital”, Revue d’Économie Politique, vol. , hypotheses of rational expectations and Ricardian equivalence can not be anticipations rationnelles et de l’equivalence ricardienne n’est pas rejetee par les .

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The estimates for the coefficients on tax revenue in Table 2, however, indicate that Ricardian equivalence holds for high-and low-income solvent countries, when expectations are not included among the regressors, as well as for high-and low-income debt-ridden countries, when expectations are accounted for. Barro provided some theoretical foundation for Ricardo’s hesitant speculation [4] apparently in ignorance of Ricardo’s earlier notion and de Viti’s subsequent extensions.

The identification of homogeneous groups of countries, through the cluster analysis, opens the way for a three-group discriminant analysis, in order to.

Testing the Debt-Illusion Hypothesis – Persée

See general information about how to correct material in RePEc. Therefore, substantial modifications are required in both the definition and the particular form of the utility function, employed by previous studies on the equivalence of tax and debt.

Even less conclusive is the reaction pattern of households with respect to changes in the tax burden. If these conditions hold, cuts in taxes imply a later pressure to raise taxes, since government has to fill the resource gap in the budget which is the result of the initial tax cut. With the present construction form for the first discriminant function, the corresponding discriminant scores must show up with large negative values for the debt-ridden countries and with positive values for the solvent countries.

Please note that corrections may take a couple of weeks to filter through the various RePEc services. The variable with the lowest FPE is picked out and the same process is repeated with the fourth, fifth and sixth variable. Conclusions The primary accomplishment of this paper was the empirical investigation of the debt neutrality hypothesis in a pooled cross-section, time-series macro-theoretic model.

When implementing comprehensive fiscal reforms which make public sector more efficient governments do not exert countercyclical efforts of course, but form the necessary conditions for regaining countercyclical potential.

L’Equivalence Ricardienne dans les Modèles de Croissance avec Accumulation du Capital | TSE

In an attempt to interpret the diversification of consumer behaviour across countries, Nicoletti argues that public concern over the necessity of fiscal res. This finding is consistent with the intuitive conviction that households cannot be unaware of the constraints that bind government actions, in periods of rising concern about the sustainability of fiscal deficits.


Debt, deficits and finite horizons. The Ricardian view of equivalence between debt and tax financing is tested in the context of a pooled cross-section, time-series macroeconomic model for 49 countries. Testing the Debt-Illusion Hypothesis. The reality [14] was that the net private saving as a percentage of GNP was 8. Classification of the countries into groups according to the level of indebtedness and the level of income [link] Table 2.

Journal of Public Finance 52 1: The Ricardian equivalence proposition also known as the Ricardo—de Viti—Barro equivalence theorem [1] is an economic hypothesis holding that consumers are forward looking and so internalize the government’s budget constraint when making their consumption decisions.

Martin Feldstein argued in that Barro ignored economic and population growth.

This happens especially in cases where:. As Mundlak [] has shown, this estimator amounts to applying ordinary least squares to 9expressed in terms of transformed variables. After dropping these coefficients and the cross products of AlriT, Ricarvienne, Z and Z’ from the last relationship, the following equation is derived. All articles with dead external links Articles with dead external links from April Articles with permanently dead external links All articles with unsourced statements Articles with unsourced statements from May Articles to be expanded from February All articles ricarienne be expanded Articles using small message boxes.

According to the hypothesis, taxpayers will anticipate that they will have to pay higher taxes in future. The corresponding government budget constraint may be represented by the relationship. equivxlence

It also allows you to accept potential citations to this item that we are uncertain about. The data set for the present study has been constructed from three international sources National Accounts Statistics United Nations for private final consumption expenditure and GNP International Financial Statistics Yearbook IMF ricxrdienne monetary base and deposits and Government Finance Statistics Yearbook IMF for government expenditure on goods and services central government deficit public debt and rax reve nue The asset holdings of the household sector are defined as the sum of demand depo sits currency time and savings accounts and public debt Data for other wealth items residential structures consumer durables corporate equities foreign bonds and so on were not available for the majority of the sample countries.

L’Equivalence Ricardienne dans les Modèles de Croissance avec Accumulation du Capital

In a equivallence to the comments of Feldstein and Buchanan, Barro recognized that uncertainty may play a role in affecting individual behaviour with respect to government finance. To surpass the problem, the substitution of the original data for their annual rates of growth could be a eequivalence first approximation for the time being, equvalence disregard the expected or unexpected nature of the variables on the right-hand side of 8.


On the other hand, highlighting the controversy between the traditional view and the equivalence theory over fiscal policy effectiveness in a global setting is usually constrained by the availability of time-series data ; that is, only a few observations are available over time, but a great many observations are available for different countries at a point in time.

In estimating the VAR for the regressors of 9we have included among the right-hand side variables the lagged values of income, government spending, tax revenue, private consumption, the price level, the ratio of taxes to budget deficit, changes in the monetary base and changes in the asset holdings of the household sector.

In these countries, the substitution of debt for taxes, at a given stream of government spending, has a tendency to reduce consumption expenditure, so that public deficits appear to be more than offset by increased private savings.

Once anticipated and unanticipated series are available, equation 9 can be estimated by an appropriate technique. Similarly, the same tax burden may affect private consumption in a variety of ways, should it be associated with differing amounts of fiscal deficit.

The identification of homogeneous groups of countries, through the cluster analysis, opens the way for a three-group discriminant analysis, in order to Ricardian equivalence underlines the importance of fiscal reforms, since such reforms are needed in order to change the path of government expenditures.

Barro, Robert J, The rucardienne of the discriminant analysis are presented in Table 1. The validity of either the Ricardian proposition or the traditional view is usually tested equovalence examining the coefficient values of taxes and government expenditure.

Using lagged equivakence in a pooled cross-section time-series VAR model, however, means in essence that agents in each country use information from the other 48 sample countries in order to formulate their expectations as to the economic developments in their own country. University of Athens Department of Economics The REH is said to hold if certain stringent assumptions are met intergenerational altruistic preferences perfect capital markets lump-sum taxation certainty etc.

In the conventional formulations of utility functions, the arguments usually included are private and public consumption. Since there are three groups, two discriminant functions can be calculated. Rational forward-looking individuals save the additional disposable income, anticipating that the ricadienne public debt will be financed by future tax increases2.