Some Inefficiency Implications Of Generational Politics And Exchange
AbstractThis paper explores the implications of generational selfishness in a model in which each generation has its own government. Such selfish generational governments will potentially distort the economy along a number of dimensions. One is the monopolization of factor supplies; another is the under- or overprovision of durable public goods. We demonstrate that selfish generations may place sizable marginal taxes on their factor supplies in order to monopolize their factor markets. We also show that selfish generations will provide inefficient levels of durable public goods both at the local and national levels. Finally, we demonstrate that generational inefficiencies can arise even in models of cooperative bargaining because of the first-mover advantage of earlier generations. Copyright 1993 Blackwell Publishers Ltd..
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Economics & Politics.
Volume (Year): 5 (1993)
Issue (Month): 1 (03)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985
Other versions of this item:
- Laurence J. Kotlikoff & Robert W. Rosenthal, 1994. "Some Inefficiency Implication of Generational Politics and Exchange," NBER Working Papers 3354, National Bureau of Economic Research, Inc.
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