Does Ricardian Equivalence Hold When Expectations are not Rational?

This paper considers the Ricardian Equivalence proposition when expectations are not rational and are instead formed using adaptive learning rules. We show that Ricardian Equivalence continues to hold provided suitable additional conditions on learning dynamics are satisfied. However, new cases of failure can also emerge under learning. In particular, for Ricardian Equivalence to obtain, agents’ expectations must not depend on government’s financial variables under deficit financing.

It’s Not About the Work Ethic

Journal review:Sascha O. Becker and Ludger Woessmann, “Was Weber Wrong? A Human Capital Theory of Protestant Economic History,” The Quarterly Journal of Economics, May 2009.

The names in Spain are mainly not in vain: Intergenerational mobility and the informational content of surnames

The paper presents a (genetic) model of the joint distribution of surnames and income. It shows that we can infer how important background is by looking at how informative surnames are. Extensions of the model allow for the possibility of assortative mating, and the introduction of ethnic differences in the income process (due to discrimination or any other reason).