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This paper analyses a growth model wherein saving results from bequest-as-consumption. It first looks at the market equilibrium and at the optimal solution. Then it turns to the issue of decentralizing the optimal solution with various taxes and transfers. Depending on the available instruments,...
Persistent link: https://www.econbiz.de/10005669223
I show in this paper that in an overlapping generations economy with production à la Diamond (1970) in which the agents can only save in terms of capital (i.e. with no asset bubbles à la Tirole (1985) or public debt as in Diamond (1965)), there is a period-by- period balanced fiscal policy...
Persistent link: https://www.econbiz.de/10005042963
This paper analyses a growth model wherein saving results from bequestas-consumption. It first looks at the market equilibrium and at the optimal solution. Then it turns to the issue of decentralizing the optimal solution with various taxes and transfers. Depending on the available instruments,...
Persistent link: https://www.econbiz.de/10005008268
This paper establishes, in the context of the Diamond (1965) overlapping generations economy with production, that the risk that savings in unbacked assets (like fiat money or public debt) become worthless implies that, not only the first-best steady state, but even the best steady state...
Persistent link: https://www.econbiz.de/10008550244
This paper considers a government that seeks both to redistribute income and to encourage or discourage the consumption of a certain good. This good is assumed to be either a merit or demerit good. Individuals differ in their exogenous income and in their preferences for the merit good. The...
Persistent link: https://www.econbiz.de/10005779483
Redistributive taxation under uncertainty has two functions: not only the redisribution of income across individuals who are ex-ante different but also the sharing of risk between them. The economic integration of factor markets changes the distribution of income within each country, and so the...
Persistent link: https://www.econbiz.de/10005634049
This paper examines the properties of the optimal nonlinear income tax when preferences are quasilinear in leisure and heterogeneous. Individuals differ in their ability and in their preferences for leisure. The government seeks to redistribute income. It can perfectly observe the level of...
Persistent link: https://www.econbiz.de/10005634141
We introduce a simple measure of risk aversion in the large. Besides satisfying properties which are conceptually analogous to the usual properties of the Arrow-Pratt measure, the index of risk aversion in the large leads to a stronger concept of decreasing risk aversion, which necessarily imp...
Persistent link: https://www.econbiz.de/10005634228
This paper studies the optimal direct/indirect tax mix in a setting where individuals differ in several unobservable characteristics (productivity and endowments). Tax instruments (income and commodity taxes) are constrained solely by the information structure.
Persistent link: https://www.econbiz.de/10005669227
Much attention has been given to the impact of fiscal competition on the level of public expenditure, but relatively little to the impact on its composition. Using a broadly familiar and reasonably rich model of fiscal competition in the presence of mobile capital, this paper establishes a...
Persistent link: https://www.econbiz.de/10005669290