01732cas a2200253 a 4500 AALejournalIMF004223 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451864281 1018-5941 BD-DhAAL BD-DhAAL Sgherri, Silvia. Mr. Ricardo's Great Adventure : Estimating Fiscal Multipliers in a Truly Intertemporal Model / Silvia Sgherri, Tamim Bayoumi. Washington, D.C. : International Monetary Fund, 2006. 1 online resource (30 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We estimate tax multipliers in a "Blanchard-Yaari" consumption model where Ricardian equivalence is broken because the private sector discounts the future at a faster rate than the real rate of interest. The model fits U.S. data since 1955 extremely well-entailing a discount wedge of around 20 percent a year and fiscal multipliers of 0.15-0.4-depending on the permanence of the change in taxes/transfers, and is much superior to one that assumes some consumers are fully Ricardian and others follow simple rules of thumb. The implied high private sector rate of discount has wide implications for policymakers. Mode of access: Internet Bayoumi, Tamim. IMF Working Papers; Working Paper ; No. 2006/168 Full text available on IMF http://elibrary.imf.org/view/journals/001/2006/168/001.2006.issue-168-en.xml IMF e-Library