John Cochrane is blogging, something I take complete credit for since I introduced Cochrane’s ideas to HTML here.
He writes in a lengthy internally dependent style reminiscent of my own. Nonetheless I will try to excerpt the key points
We all agree that “Ricardian Equivalence” is how the economy would and should work, if there were no “frictions,” or other problems.
I am not so sure about that. From what comes later it is clear that Cochrane means something different by Ricardian Equivalence than I do.
When I use the term Ricardian Equivalence I mean that when the government borrows money the fact that future taxes will have to rise induces folks in the economy to save more money.
What’s absolutely key here – and I will show later – is that this means that ceteris paribus interest rates do not rise from an increase in government borrowing.
This…
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Utopia, you are standing in it! 
Mar 16, 2016 @ 09:37:11
If ricardian equivalence did not occur in Japan during the 90s then exactly when would it occur?
It is a theory looking for evidence.
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