Are the Conditions for Ricardian Equivalence Theorem Likely to Hold in Developing Countries?

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Ankara Hacı Bayram Veli Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi
Volume:3 Issue:1
Are the Conditions for Ricardian Equivalence Theorem Likely to Hold in Developing Countries?

Are the Conditions for Ricardian Equivalence Theorem Likely to Hold in Developing Countries?

Authors : Mustafa Ali SARILI

Pages : 199-206

View : 16 | Download : 12

Publication Date : 2001-06-01

Article Type : Research Paper

Abstract :Some countries suffer budget deficit problems. Such countries sell bonds or create money to finance their budget deficits. Ricardian Equivalence Theorem insert ignore into journalissuearticles values(RET); suggests that budget deficits should be financed by selling bonds because this is only postponement of taxes. This article tries to examine whether the RET holds in developing countries or not. RET has many assumptions. These assumptions will be analysed for developing countries.
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