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Fiscal Policy and Private Sector Saving Behavior in Developing Economies

Author

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  • Nadeem U. Haque

    (International Monetary Fund)

Abstract

Tax or debt financing of a given rate of government expenditures would, according to the well-known Ricardian equivalence proposition, have equivalent effects on aggregate demand. Among the sources of a deviation from equivalence is the possibility that the government and the private sector have different planning horizons. The paper finds no empirical support for differing planning horizons across sectors in a group of 16 developing economies and, therefore, rules out such differences as a source of deviation from equivalence.

Suggested Citation

  • Nadeem U. Haque, 1988. "Fiscal Policy and Private Sector Saving Behavior in Developing Economies," IMF Staff Papers, Palgrave Macmillan, vol. 35(2), pages 316-335, June.
    • Handle: RePEc:pal:imfstp:v:35:y:1988:i:2:p:316-335
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    Citations

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    Cited by:

    1. Basil Dalamagas, 1994. "Testing the Debt-Illusion Hypothesis," Revue Économique, Programme National Persée, vol. 45(4), pages 1079-1094.
    2. Brunila, Anne, 1997. "Current income and private consumption: Saving decisions: Testing the finite horizon model," Bank of Finland Research Discussion Papers 6/1997, Bank of Finland.
    3. Brunila, Anne, 1996. "Fiscal policy and private consumption : Saving decisions : Evidence from Finland," Research Discussion Papers 28/1996, Bank of Finland.
    4. Himarios, Daniel, 1995. "Euler equation tests of Ricardian equivalence," Economics Letters, Elsevier, vol. 48(2), pages 165-171, May.
    5. Jalal Siddiki, 2010. "The Ricardian equivalence hypothesis: evidence from Bangladesh," Applied Economics, Taylor & Francis Journals, vol. 42(11), pages 1419-1435.
    6. Brunila, Anne, 1997. "Current income and private consumption : Saving decisions : Testing the finite horizon model," Research Discussion Papers 6/1997, Bank of Finland.
    7. António Afonso, 2008. "Euler testing Ricardo and Barro in the EU," Economics Bulletin, AccessEcon, vol. 5(16), pages 1-14.
    8. Griet Malengier & Lorenzo Pozzi, 2005. "Examining Ricardian Equivalence by estimating and bootstrapping a nonlinear dynamic panel model," Money Macro and Finance (MMF) Research Group Conference 2005 61, Money Macro and Finance Research Group.
    9. Brunila, Anne, 1996. "Fiscal policy and private consumption: Saving decisions: Evidence from Finland," Bank of Finland Research Discussion Papers 28/1996, Bank of Finland.
    10. repec:zbw:bofrdp:1997_006 is not listed on IDEAS
    11. Roberto Ricciuti, 2003. "Assessing Ricardian Equivalence," Journal of Economic Surveys, Wiley Blackwell, vol. 17(1), pages 55-78, February.
    12. Gumus, Erdal, 2003. "Crowding-Out Hypothesis versus Ricardian Equivalence Proposition: Evidence from Literature," MPRA Paper 42141, University Library of Munich, Germany.
    13. repec:ebl:ecbull:v:5:y:2008:i:16:p:1-14 is not listed on IDEAS
    14. Islam, Roumeen & Wetzel, Deborah L., 1991. "The macroeconomics of public sector deficits : the case of Ghana," Policy Research Working Paper Series 672, The World Bank.
    15. repec:zbw:bofrdp:1996_028 is not listed on IDEAS

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