Evans, George W.; Honkapohja, Seppo; Mitra, Kaushik - Centre for Dynamic Macroeconomic Analysis, University … - 2010
This paper considers the Ricardian Equivalence proposition when expectations are not rational and are instead formed … using adaptive learning rules. We show that Ricardian Equivalence continues to hold provided suitable additional conditions … Ricardian Equivalence to obtain, agents¡¯ expectations must not depend on government¡¯s financial variables under deficit …