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 .
|Published (Last):||18 May 2014|
|PDF File Size:||15.98 Mb|
|ePub File Size:||13.28 Mb|
|Price:||Free* [*Free Regsitration Required]|
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. In particular, the share parameter takes on zero or near-zero values for individuals who fail to recognize the future tax implications of substituting debt for tax financing Keynesian approach ; by contrast, the parameter a is closer to its mid value of 0.
Blanchard, Olivier J, David Ricardo was the first to propose this possibility in the early nineteenth century; however, he was unconvinced of its empirical relevance. Therefore, the private and public sectors can be integrated by combining consumer’s and government’s budget constraints.
Following Rossi , we directly compute the parameters of the disutility function, without explicitly solving the consumer’s optimization problem, by estimating the marginal condition from 1 and 2 as follows:.
After dropping these coefficients and the cross products of AlriT, AlnAD, Z and Z’ ricardienn the last relationship, the following equation is derived.
Accordingly, formulation of consistent, log-transformed time series for these variables is unfeasible. 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.
To this end, the above described two-step procedure cluster and discriminant analyses is replicated for the countries belonging to each of the three groups and new discriminant scores are derived, which take on increasing values as per capita income rises.
Our purpose is to find out whether consumption in sensitivity is best approximated by a Ricardian regime, where fiscal policy is inefficient in steering demand or, instead, by a Gicardienne regime, where fiscal policy plays a dominant role. The first dummy takes a value of 1 for solvent, high-income countries and zero for the remaining countries ; the second takes a unit value for debt-ridden, high-income countries and zero otherwise ; the third is assigned unit equivalencw for intermediate, high-income countries ; the fourth separates, in a similar fashion, rixardienne solvent, low-income countries from the rest and the fifth designates the debt-ridden, low-income countries.
Barro took the question up independently in the s, in an attempt to give the proposition a firm theoretical foundation. Their results refute the Ricardian equivalence hypothesis.
Test de l’équivalence Ricardienne par la Modélisation SVAR
The consideration of dissimilarities in debt ratio and living standards implies that a decision should be reached on which group of countries is likely to differ from the others, in the process of testing REH. In this respect, Equivalenve equivalence clarifies the exact conditions necessary for countercyclical fiscal policies.
Governments do not have any potential to exert countercyclical efforts if the path of government expenditures is fixed and if agents form rational expectations. A Search for Synthesis ricarvienne Economic Theory. In other words, Ricardian equivalence does not mean that any countercyclical efforts will fail, but outlines the necessary conditions for that failure and, naturally, for success at the same time.
Thus, depending on the specific form of consumer behaviour, the marginal disutility of paying a given amount of tax in the present period may be equal to or much lower than the marginal disutility of creating a debt-financed budget deficit of equal amount by the government which, in turn, equals the marginal disutility of the present value of the stream of taxes, that will be levied in the future, in order to finance the flow of payments to lenders.
Testing the Debt-Illusion Hypothesis – Persée
The effects of debt financing on private consumption and savings have been a recurrent and mostly controversial topic in macroeconomic analysis for a long time. Such constraints diminish households’ ability to substitute consumption intertemporally, as is postulated by REH. This happens especially in cases where:.
If the Ricardian equivalence hypothesis is true, the rational consumers of the economy, who expect the government to raise taxes, try to reduce their consumption and increase their savings.
Regardless of the particular regime Ricardian or Keynesian equivxlence, within which consumption decisions are made, the representative individual may be plausibly assumed to look forward with respect to the fiscal affairs of the government, in the sense that he takes into account the benefits derived from the provision of public goods and services.
Following Rossi , we directly compute the parameters of the disutility function, without explicitly solving the consumer’s optimization problem, by estimating the marginal condition from 1 and 2 as follows: The interpretation given in the present text is that individuals in solvent coun- It also allows you to accept potential citations to this item that we equivalenc uncertain about. We avoid imposing formal short run and long run constraints, because this may overestimate the compensation rate and bias the estimation of structural multipliers.
Ricardian equivalence has crucial importance in the fiscal policy considerations of new classical macroeconomics. In the next stage, trivariate equations are estimated, involving the lagged values of consumption and lagged values of two of the remaining variables, the order of adding the non-consumption variables to the consumption equation being determined by means of the specific gravity criterion2.
Countercyclical aspirations need not to be abandoned, only the playing-field of economic policy got narrowed by new classicals. Research by Chris Carroll, James Poterba  and Lawrence Summers  shows that the Ricardian equivalence hypothesis is refuted by their results. The results of the discriminant analysis are presented in Table 1. The model was an important contribution to the New Classical Macroeconomicsbuilt around the assumption of rational expectations.
Insignificant significant estimates are interpreted as lending support to the Ricardian argument traditional viewin a theoretical framework which utilizes the fiscal variables in absolute terms, rather than in ratios.
L’Equivalence Ricardienne dans les Modèles de Croissance avec Accumulation du Capital | TSE
ricarddienne This section needs expansion. Private agents in overindebted countries, therefore, seem to discount the expected nation-wide economic difficulties and, hence, to compromise with lower consumption levels in ricaedienne present period with a view to avoid substantial spending cuts at a later period.
Barro provided some theoretical foundation for Ricardo’s hesitant speculation  apparently in ignorance of Ricardo’s earlier notion and de Viti’s subsequent extensions.
The Theory of New Classical Macroeconomics. Debt accumulation — so the argument goes — induces precautionary savings when it surpasses the threshold, beyond which its adverse consequences income inequality, high interest rates, balance-of-payments problems, etc.
All papers reproduced by permission.