A test of Ricardian Equivalence and public debt neutrality

Amaresh Das

International Journal of Monetary Economics and Finance, 2010, vol. 3, issue 3, 270-279

Abstract: By virtue of the Ricardian Equivalence (RE) proposition, government bonds do not represent net wealth. Therefore, household's savings will increase to offset the government policy. The paper econometrically tests if governments bonds do represent net wealth based on the time series macrodata from India spanning a time from 1990 to 2005. While doing this, the paper explores the dynamic link between domestic government borrowing and private sector savings within a possibly co-integrated system where the joint endogeneity of the variables is allowed.

Keywords: co-integrated systems; co-integration; ADF; augmented Dickey–Fuller test; endogeneity; Ricardian equivalence proposition; household savings; government policy; government bonds; net wealth; time series; India; domestic government borrowing; private sector savings. (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=33457 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:ids:ijmefi:v:3:y:2010:i:3:p:270-279

Access Statistics for this article

More articles in International Journal of Monetary Economics and Finance from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().