Claim: Ricardian equivalence, an economic hypothesis holding that consumers are forward looking, requires assumptions that have been seriously challenged; however, even in a laboratory setting where all assumptions required are ensured to hold, behaviour of individuals is inconsistent with Ricardian equivalence.
Evidence: The Ricardian equivalence proposition (also known as the Ricardo–de Viti–Barro equivalence theorem) is an economic hypothesis holding that consumers are forward looking and so internalize the government's budget constraint when making their consumption decisions. Ricardian equivalence requires assumptions that have been seriously challenged. However, even in a laboratory setting where all assumptions required are ensured to hold, behaviour of individuals is inconsistent with Ricardian equivalence.