Consumption, Wealth, and Finite Horizons: Tests of Ricardian Equivalence.

The authors find strongly non-Ricardian results when they reestimate Paul Evans's (1988) model using a better approximation of the market value of wealth. The authors also examine the long-run properties of the data and find results consistent with their regression evidence when they allow for declining labor income as modeled by Jordi Gali (1990). The authors' findings in support of non-Ricardian behavior by consumers stand in sharp contrast to those of both Evans and Gali. Copyright 1996 by Oxford University Press.