The Simplest Possible Presentation of the Life Cycle-Permanent Income Hypothesis and Ricardian Equivalence

9 Pages Posted: 12 Sep 2011

See all articles by Sheldon H. Stein

Sheldon H. Stein

Cleveland State University - Economics

Date Written: September 1, 2011

Abstract

In this paper, a set of simple numerical examples are used to illustrate the essence of the life cycle-permanent income hypothesis and Ricardian equivalence. The level of mathematical sophistication required of the reader is nothing more than grade school arithmetic. Since the simple Keynesian absolute income theory of consumption requires nothing more than elementary school mathematical competence, the playing field of the various theories is leveled for the novice reader.

JEL Classification: A2, E20, E21

Suggested Citation

Stein, Sheldon H., The Simplest Possible Presentation of the Life Cycle-Permanent Income Hypothesis and Ricardian Equivalence (September 1, 2011). Available at SSRN: https://ssrn.com/abstract=1925780 or http://dx.doi.org/10.2139/ssrn.1925780

Sheldon H. Stein (Contact Author)

Cleveland State University - Economics ( email )

Cleveland, OH 44115
United States
216-687-4537 (Phone)
216-687-9206 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
129
Abstract Views
665
rank
282,879
PlumX Metrics