Explaining the Variability of Debt Neutrality Tests Results: A Meta-Analysis of Ricardian Equivalence

Tomas Wroblowsky
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Tomas Wroblowsky: Technical University Ostrava

South-Eastern Europe Journal of Economics, 2007, vol. 5, issue 1, 7-24

Abstract: Many empirical studies trying to verify (or reject) the Ricardian equivalence theorem have been published since 1974, when Barro re-launched the debate about the consequences of debt-financed tax cuts. The results of those studies are mixed, both favoring and rejecting the equivalence. With such mixed results in hand, no one can definitely say if Ricardian equivalence holds or not. Stanley (1998) provides a meta-analysis of 27 studies testing the Ricardian equivalence hypothesis. He finds strong evidence of the hypothesis' falsity. In this paper, I provide similar meta-analysis to that of Stanley, but I add the newest empirical studies to the sample and change the meta-independent variables structure. The results are very similar to those achieved by Stanley.

Keywords: Ricardian equivalence; debt neutrality; meta-analysis; effect size (search for similar items in EconPapers)
JEL-codes: C10 H61 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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