Departures from Ricardian Equivalence : An Experimental Evaluation

We construct an overlapping-generations experiment to test for some allegedly departures from Ricardian equivalence. In the first treatment the setting is close to the theoretical model, while in the second we allow for liquidity-constrained consumers. Finally, we introduce uncertainty on future income. We can never accept the hypothesis that agents behave in a Ricardian way, with some exceptions in the first treatment. We find clear evidence of departure in the other two settings. Our subjects appear to first decide how much to consume out of their resources, and then, sequentially and residually, to decide how much to bequeath