Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/144676
Authors: 
Hayo, Bernd
Neumeier, Florian
Year of Publication: 
2016
Series/Report no.: 
Joint Discussion Paper Series in Economics 11-2016
Abstract: 
In this paper, we utilise data from a German population survey to test the validity of the Ricardian equivalence theorem (RET). In 2013, 2,000 representatively chosen people were asked whether they have altered their consumption and saving behaviour in response to the significant increase in public debt that occurred between 2008 and 2012. Our findings suggest that, in general, RET does not hold. Only 7% of our respondents state that they consume a smaller proportion of their income and save a larger proportion in response to public debt accumulation. Moreover, using multinominal logit regressions, we find that individuals' consumption responses are significantly related to their economic situation, time preferences, education, and age.
Subjects: 
Ricardian equivalence
public debt
private consumption
private saving
survey
Germany
JEL: 
D12
D91
E21
H31
Document Type: 
Working Paper

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