Question
If a government expanded its deficit and Ricardian equivalence held, what impact would this have on national income? What assumptions are required for Ricardian equivalence
If a government expanded its deficit and Ricardian equivalence held, what impact would this have on national income? What assumptions are required for Ricardian equivalence to hold? How plausible do you think these assumptions are? Why or why not?
Step by Step Solution
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Step: 1
Ricardian equivalence is an economic theory that suggests that changes in government borrowing and deficits do not have an impact on national income o...
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Step: 2
Step: 3
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Econometric Analysis
Authors: William H. Greene
5th Edition
130661899, 978-0130661890
