Budgetary deficits and Ricardian equivalence: The case of India, 1950–1986

Ghatak, Anita; Ghatak, Subrata

doi:10.1016/0047-2727(95)01551-5

Cited by 37 publications

(35 citation statements)

References 11 publications

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“…of the REH are consistent with the existing literature on developing countries (Ghatak and Ghatak (1996), Khaled (1996), Haque (1988)). …”

supporting

confidence: 80%

“…Various formulations of the Buiter-Tobin type approach for examining the REH and crowding-out hypothesis used in the literature are summarised below (see, Ghatak and Ghatak (1996) for a survey):…”

Section: Various Specifications Of the Reh And Crowding-out Hypothesismentioning

confidence: 99%

“…whether fiscal deficits are financed by debt or by tax increases, is inconsequential in its effects upon private consumption and therefore trade balances, since economic agents consider present period's deficit financing as a future period's tax liability (Barro (1974(Barro ( , 1989). The stability of saving and 3 For example, Ghatak and Ghatak (1996); Gupta (1992); Haque (1988); Khalid (1996). 4 The relationship, according to the twin deficits hypothesis, between government budget deficits and trade deficits can be summarised as follows (see Khalid and Guan (1999) for a good review).…”

Section: Introductionmentioning

confidence: 99%

“…One is the estimation of structural private consumption models to examine the impact of government expenditures on private consumption (Becker (1997);Ghatak and Ghatak (1996); Khalid (1996)). Empirical evidence on this issue is inconclusive (see Leiderman and Blejer (1988) and Seater (1993) for a survey).…”

Section: Introductionmentioning

confidence: 99%

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The Ricardian equivalence hypothesis: evidence from Bangladesh

Siddiki

2010

Applied Economics

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This paper examines the Ricardian equivalence hypothesis (REH) and its sources of failure in the case of Bangladesh using various theoretical specifications, annual data Empirical results reveal that real per capita private consumption (C) under various specifications is cointegrated generally at the 5% level with real per capita income (Y), government expenditure before and after interest rate repayments (G & G2), taxes (T) and the interest rate (r). Results reveal that an increase in G, G2, T and r reduces C and that that an increase in budget deficits raises trade deficits. These results highlight the importance of fiscal policies in boosting private consumption and controlling trade deficits, which are the prime goals of stabilisation policies being followed by Bangladesh.

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“…of the REH are consistent with the existing literature on developing countries (Ghatak and Ghatak (1996), Khaled (1996), Haque (1988)). …”

supporting

confidence: 80%

Section: Various Specifications Of the Reh And Crowding-out Hypothesismentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The Ricardian equivalence hypothesis: evidence from Bangladesh

Siddiki

2010

Applied Economics

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“…He found that government spending and private consumption are better described as complementary rather than as substitutes. Ghatak and Ghatak (1996) found no support for the Ricardian equivalence for India. There are significant crowding out effects on private consumption.…”

Section: Literature Reviewmentioning

confidence: 96%

Impact of Budget Deficit on Private Consumption inWAEMU Countries: Evidence from Pooled Mean Group Estimation

Keho¹

2016

IJEF

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This study empirically investigates the impact of budget deficit on private consumption in seven member countries of the West African Economic and Monetary Union (WAEMU), namely Benin, Burkina Faso, Côte d'Ivoire, Mali, Niger, Senegal and Togo. It applies the pooled mean group estimation method to annual data covering the period 1970 to 2013. The results show that budget deficit and per capita GDP have long run positive effects on household consumption whereas inflation rate is detrimental to private consumption. This suggests that private consumption cannot be held responsible for any crowding-out effects that budget deficit might have on long run aggregate demand and economic growth in WAEMU countries. Therefore, restricting the size of budget deficits is costly for the development of WAEMU countries.

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Professor Subrata Ghatak (1939‐2012)

Mallick

2013

J of Intl Development

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Budgetary deficits and Ricardian equivalence: The case of India, 1950–1986

Cited by 37 publications

References 11 publications

The Ricardian equivalence hypothesis: evidence from Bangladesh

The Ricardian equivalence hypothesis: evidence from Bangladesh

Impact of Budget Deficit on Private Consumption inWAEMU Countries: Evidence from Pooled Mean Group Estimation

Professor Subrata Ghatak (1939‐2012)

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