How does the concept Ricardian equivalence coupled with consumption smoothing create a problem for fiscal policy?

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Rahul Sunny answered 2 years ago

explain the ricardian equivalence result: "the timing of taxation does not affect the timing of consumption"....

explain the ricardian equivalence result: "the timing of taxation does not affect the timing of consumption". Show how the existence of a binding borrowing constraint changes this result.

Write a simple macroeconomic model where Ricardian equivalence does not hold. Explain why Ricardian equivalence does...

Write a simple macroeconomic model where Ricardian equivalence does not hold. Explain why Ricardian equivalence does not hold in this model by deriving necessary conditions.

What is Ricardian equivalence? According to the Ricardian view of government debt, how does a debt-financed...

What is Ricardian equivalence? According to the Ricardian view of government debt, how does a debt-financed tax cut affect public saving, private saving, and national saving? What is one reason that Ricardian equivalence might not hold?

2. Assuming Ricardian equivalence holds, how much would current consumption fall as a result of a...

2. Assuming Ricardian equivalence holds, how much would current consumption fall as a result of a one unit increase in government spending, assuming this increase did not affect the real interest rate? What is then the total impact on the demand for goods? 3. Explain in words what the partial expenditure multiplier measures? What does it equal to assuming Ricardian equivalence holds? What about when Ricardian equivalence does not hold?

Public Economics How does Social Security promote consumption smoothing? (Is it all paternalism?)

3) Fiscal Policy a. What does fiscal policy refer to? b. How could fiscal policy affect...

3) Fiscal Policy a. What does fiscal policy refer to? b. How could fiscal policy affect AD? c. Why would a government use fiscal policy to stabilize the economy ? d. What, specifically, would they do to stabilize? e. What are some of the risks of using fiscal policy to stabilize? f. What are automatic fiscal stabilizers, and how do they affect the budget deficit/surplus?

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How does the concept Ricardian equivalence coupled with consumption smoothing create a problem for fiscal policy?

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