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Ricardians in the European Union: The Role of Fiscal Rules

Author

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  • Matej Boor

    (University of Economics in Bratislava, Faculty of National Economy, Slovak republic)

Abstract

The presented paper deals with the concept of Ricardian equivalence in the European Union. The debt crisis has drawn the attention of professionals and the general public to the sustainability of public finance. The growing government debts of countries also affect the consumer behavior of households. The main objective of the paper is to determine the role of government debt and compliance with fiscal rules on household consumer behavior in the European Union and the Eurozone. The results of the empirical study confirmed the validity of the Ricardian equivalence in the European union during the time period 1995-2020, where the year-on-year change in the amount of government debt and the distance from compliance with fiscal rules dampens the growth of household expenditures.

Suggested Citation

  • Matej Boor, 2021. "Ricardians in the European Union: The Role of Fiscal Rules," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 71(3), pages 245-266, November.
    • Handle: RePEc:fau:fauart:v:71:y:2021:i:3:p:245-266
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    File URL: https://journal.fsv.cuni.cz/mag/article/show/id/1489
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    More about this item

    Keywords

    Ricardian equivalence; fiscal rules; government debt; household expenditure;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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