|
| |
| Nektarios Michail, Theodosis Kallenos and Ioanna Evangelou |
| |
| ''Are agents Ricardian? Evidence from the CBC survey'' |
| ( 2024, Vol. 44 No.3 ) |
| |
| |
| This paper provides survey estimates on whether economic agents show Ricardian-like behaviour, via providing the yes/no answers to the question “If there is a permanent increase in the level of government spending, we can expect an increase in taxation”, in a survey conducted by the Central Bank of Cyprus in 2018. The findings suggest that only 12% of the respondents do not expect an increase in taxation, classifying them as non-Ricardian. Around 85% of the respondents expect an increase in taxation following an increase in government spending, suggesting that they display some degree of forward-looking behaviour. The finding holds important implications for fiscal policy and provides another potential explanation on why fiscal multipliers tend to be less than unity. |
| |
| |
| Keywords: Ricardian equivalence, survey, government, taxation |
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
H3 - Fiscal Policies and Behavior of Economic Agents: General |
| |
| Manuscript Received : Jul 22 2024 | | Manuscript Accepted : Sep 30 2024 |
|
