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The Ricardian equivalence: A theoretical curiosity? Some indications for the Venezuelan case (1950-2010)

Bladimir David Pozo Sulbarán ()
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Bladimir David Pozo Sulbarán: Departamento de Estudios y Estadísticas Económicas (DEEE) del Banco Central de Venezuela (BCV), Subsede Maracaibo.

Economía, 2013, vol. 38, issue 35, 101-125

Abstract: This paper tries to extract certain indications about the validity of the ricardian equivalence as an approximation of the real performance of the Venezuelan economy based on the close relationship with the permanent income hypothesis. Using data for the period 1950-2010 and Koyck rationalized model (1954), specifically, the model of adaptive expectations (Greene, 1999) and some variants, several regression models were estimated. Empirical evidence suggests that the permanent income hypothesis does not seem to be a good approximation for consumption in Venezuela. Finally, it is very likely that the thesis of the ricardian equivalence is not a good approximation for the real behavior of the economy.

Keywords: Ricardian equivalence; permanent income hypothesis; Koyck Model. (search for similar items in EconPapers)
JEL-codes: E21 E62 H63 (search for similar items in EconPapers)
Date: 2013
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Handle: RePEc:ula:econom:v:38:y:2013:i:35:p:101-125