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Essays On Ricardian Equivalence, Artidiatun Adji

Economics Dissertations

The theme of this dissertation is Ricardian equivalence, and its objective is to examine the effects of government debt on private consumption expenditures (Essay One), on interest rates (Essay Two), on the current account balance (Essay Three), and on individual intertemporal decision-making (Essay Four). The effects of government debt are important if debt is neutral (e.g., if “Ricardian equivalence” holds), then a stabilization program that is based on demand management policy to curtail fiscal deficits will not be operative. On the other hand, if debt is not neutral (or if Ricardian equivalence does not hold), then deficit finance may induce …