Evans, George W.; Honkapohja, Seppo; Mitra, Kaushik - Scottish Institute for Research in Economics (SIRE) - 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 …