Ricardian Equivalence Hypothesis in the Sub-Sahara African Countries

Robert Becker Pickson () and Grace Ofori-Abebrese
Additional contact information
Robert Becker Pickson: Sichuan Agricultural University, Postal: College of Economics and Management, Sichuan Agricultural University, 211, Huimin Road, Wenjiang District, Chengdu, China
Grace Ofori-Abebrese: Kwame Nkrumah University of Science and Technology,, Postal: Department of Economics, Kwame Nkrumah University of Science and Technology, Kumasi,Ghana

Journal of Economic Integration, 2018, vol. 33, issue 3, 466-487

Abstract: The validity of the Ricardian equivalence proposition remains disputed in spite of the numerous empirical work. This study utilized panel ARDL estimation approach to investigate the evidence of Ricardian Equivalence Hypothesis in five Sub-Sahara African countries, namely Botswana, Ghana, Gambia, Nigeria, and Kenya over the period of 1981~2014. Our results show that GDP per capita and interest rate have significant positive impacts on private consumption, whereas government debt, government spending, government interest payment on the outstanding debt have negative impacts on private consumption. Ricardian equivalence hypothesis, which states that private consumption remains unchanged regardless of government’s spending, does not hold in Sub-Sahara African countries.

Keywords: Ricardian equivalence; Interest rate; Government debt; Government spending; Government debt interest payments; Inflation (search for similar items in EconPapers)
JEL-codes: E21 E31 E40 H50 H60 H63 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:ris:integr:0749

Access Statistics for this article

Journal of Economic Integration is currently edited by Seongeun Kim

More articles in Journal of Economic Integration from Center for Economic Integration, Sejong University Contact information at EDIRC.
Bibliographic data for series maintained by Yunhoe Kim ().