Premium
IS RICARDIAN EQUIVALENCE A GOOD APPROXIMATION?
Author(s) -
EVANS PAUL
Publication year - 1991
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1991.tb00851.x
Subject(s) - economics , ricardian equivalence , imperfect , equivalence (formal languages) , market liquidity , annuity , econometrics , wage , life annuity , monetary economics , microeconomics , mathematical economics , labour economics , mathematics , pension , fiscal policy , finance , linguistics , philosophy , discrete mathematics
Ricardian equivalence may be a good approximation even if all households have finite horizons, many households have short horizons, and an appreciable fraction of wage income is received by liquidity‐constrained households. The approximation is likely to be better, the more imperfect annuity markets are.