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A Three-Dimensional Approach On The Ricardian Equivalence In Romania

Author

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  • Daniel Ştefan BELINGHER

    (Institute for Economic Forecasting, Romanian Academy)

Abstract

This paper follows the validity of the Ricardian Equivalence Hypothesis in Romania for the period 2004 – 2013. In order to test this hypothesis, there has been used a Vector Error Correction Model, with three variables: households’ consumption, real GDP and budgetary revenues. The frequency of the data used is quarterly. The role of this model is to test the reaction of the households in case of occurrence of a shock in the budgetary revenues (the shock represents an increase in taxation). The results show the fact that the Ricardian Equivalence is not confirmed as being a valid theory for the Romanian economy

Suggested Citation

  • Daniel Ştefan BELINGHER, 2016. "A Three-Dimensional Approach On The Ricardian Equivalence In Romania," Romanian Economic Business Review, Romanian-American University, vol. 11(2), pages 112-122, June.
    • Handle: RePEc:rau:journl:v:11:y:2016:i:2:p:112-122
    as

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    File URL: http://www.rebe.rau.ro/RePEc/rau/journl/SU16/REBE-SU16-A10.pdf
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    References listed on IDEAS

    as
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