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CONSUMPTION, WEALTH, AND FINITE HORIZONS: TESTS OF RICARDIAN EQUIVALENCE
Author(s) -
Graham Fred C.,
Himarios Daniel
Publication year - 1996
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.1465-7295.1996.tb01395.x
Subject(s) - economics , ricardian equivalence , econometrics , consumption (sociology) , equivalence (formal languages) , value (mathematics) , contrast (vision) , regression , monetary economics , mathematics , statistics , social science , discrete mathematics , artificial intelligence , sociology , computer science , fiscal policy
We find strongly non‐Ricardian results when we re‐estimate Evans's [1988] model using a better approximation of the market value of wealth. We also examine the long‐run properties of the data and find results consistent with our regression evidence when we allow for declining labor income as modeled by Gali (1990]. Our findings in support of non‐Ricardian behavior by consumers stand in sharp contrast to those of both Evans and Gali.