This paper models a two-period overlapping-generations economy with money populated with individuals of different skills. They face a nonlinear income tax schedule and can engage in tax evasion. Money serves two purposes: the traditional one, modeled through a money-in-the-utility-function; it...

This paper re-examines the question of whether federal ex-post redistribution in terms of public funds leads to under-provision of public goods when member states may leave the economic federation. We show that federal ex-post redistribution under a binding participation constraint does not...

We characterize the optimal tax policy and quality of day care services in an OLG model in which child care arrangements chosen by parents of different skill types affect the probability that children become high-skilled adults in a type-specific way. With respect to previous contributions,...

We impose a horizontal equity restriction on the problem of finding the optimal utilitarian tax mix. The horizontal equity constraint requires that individuals with the same ability have to pay the same amount of taxes regardless of their preferences for leisure. Contrary to normal findings, we...

Paternalism, merit goods and specific egalitarianism are concepts we sometimes meet in the literature. The thing in common is that the policy maker does not fully respect the consumer sovereignty principle and designs policies according to some other criterion than individuals’ preferences....

Paternalism, merit goods and specific egalitarianism are concepts we sometimes meet in the literature. The thing in common is that the policy maker does not fully respect the consumer sovereignty principle and designs policies according to some other criterion than individuals' preferences....