Demissew Beyene Sisay and Kotosz Balázs: Is the Ricardian equivalence hypothesis valid? : an empirical study for Ethiopia.
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Abstract
There are two main dimensions of dealing with the topic of Ricardian Equivalence Hypothesis (REH) – the Keynesian proposition and the REH itself. According to the REH, today's borrowing to stimulate the economy or tax reduction – a substitution of debt for taxes -does not affect demand and consumption levels. However, the reverse is true for the Keynesian proposition. The objective of this paper is to test the validity of the REH in Ethiopia using annual data running from 1990 to 2011 by employing the bound testing – ARDL approach. The study included three main variables (the budget deficit, government consumption expenditure, and government debt) which contribute to the REH along with another variables. The result shows that government debt failed to fulfil REH. This implies that, in this study, we found limited evidence of the validity of the REH in Ethiopia.
| Item Type: | Conference or Workshop Item |
|---|---|
| Heading title: | International relations |
| Journal or Publication Title: | Proceedings of the Central European PhD Workshop on Technological Change and Development |
| Date: | 2020 |
| Volume: | 4 |
| ISBN: | 978-963-306-741-3 |
| Page Range: | pp. 397-414 |
| Language: | English |
| Publisher: | Faculty of Economics and Business Administration Doctoral School in Economics |
| Place of Publication: | Szeged |
| Event Title: | Central European PhD Workshop on Technological Change and Development |
| Event Type: | Conference |
| Event Location: | Szeged |
| Event Dates: | 2019. április |
| Related URLs: | https://acta.bibl.u-szeged.hu/77650/ |
| Uncontrolled Keywords: | Gazdaságelmélet - Etiópia |
| Additional Information: | Bibliogr.: p. 409-412. ; ill. ; összefoglalás angol nyelven |
| Subjects: | 05. Social sciences 05. Social sciences > 05.02. Economics and business |
| Date Deposited: | 2022. Dec. 06. 12:21 |
| Last Modified: | 2022. Dec. 06. 12:21 |
| URI: | http://acta.bibl.u-szeged.hu/id/eprint/77671 |
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