Euler testing Ricardo and Barro in the EU

Antonio Afonso

Economics Bulletin, 2008, vol. 5, issue 16, 1-14

Abstract: According to Keynesian economics wisdom, government debt has an effect on the economy since consumers see government debt as net wealth. However, according to the debt neutrality hypothesis of Ricardo (1817), popularised by Barro (1974), such effects would be absent. This paper's results, obtained from Euler equation estimations using a panel data approach, indicate that it would be wise to reject the debt neutrality hypothesis for the EU and that higher government indebtedness could actually deter private consumption.

JEL-codes: E6 H6 (search for similar items in EconPapers)
Date: 2008-04-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.accessecon.com/pubs/EB/2008/Volume5/EB-07E60010A.pdf (application/pdf)

Related works:
Working Paper: Euler Testing Ricardo and Barro in the EUs (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-07e60010

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().