Bayoumi, Tamim; Sgherri, Silvia - C.E.P.R. Discussion Papers - 2006
We estimate tax multipliers in a "Blanchard-Yaari" consumption model where Ricardian equivalence is broken because the private sector discounts the future at a faster rate than the real rate of interest. The model fits U.S. data since 1955 extremely well-entailing a discount wedge of around 20...