Ricardian equivalence revisited: Deficits, gifts and bequests

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• 作者：Daniel Barczyk ^{daniel.barczyk@mcgill.ca" class="auth_mail" title="E-mail the corresponding author}
• 关键词：D64 ; H31 ; H62
• 刊名：Journal of Economic Dynamics and Control
• 出版年：2016
• 出版时间：February 2016
• 年：2016
• 卷：63
• 期：Complete
• 页码：1-24
• 全文大小：812 K

文摘

Barro (1974) shows that operative altruistic transfer motives are key for Ricardian equivalence to hold. This paper evaluates the importance of this mechanism quantitatively by studying deficit-financed tax cut experiments. I use a heterogeneous-agents overlapping-generations economy with endogenously operative transfer motives to capture the fact that empirically transfers occur in some but not in all families. Altruism is calibrated to match aggregate transfer statistics. I find that the response of aggregate consumption to a tax cut is in the ballpark of a standard overlapping-generations economy, that is, an economy without altruistic family links. Welfare implications of this economy, however, move closer to a dynastic economy.