Are Government Bonds Net Wealth? Some Empirical Evidence

Tito Belchior Silva Moreira, Geraldo da Silva e Souza, Fernando Antônio Ribeiro Soares

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DOI: 10.4236/me.2011.23045                

Abstract

This paper aims to investigate the impact of government debt on economic growth for a balanced panel of G7 countries over the period 1990-2008. We found empirical evidence that Ricardian Equivalence does not holds in general. The analysis indicates that only Germany shows a negative association between public debt and economic growth. The US and France show Ricardian equivalence and UK, Japan, Italy and Canada show a positive association.

Keywords

Public Debt, Economic Growth, Ricardian Equivalence

Conflicts of Interest

The authors declare no conflicts of interest.

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