Taxation in Walrasian Economy
AbstractWe consider two models of lump sum taxation in pure exchange economy in which the state imposes taxes on (or offers financial aid to) economic agents characterized by their demand functions and initial resources. In the first model the state has its own preferences and uses the collected money to enter the market and maximize its utility while in the second model it uses the taxes to acquire fixed resources necessary for its functioning. We study the existence and structure of equilibria in general economies, the possibility of using taxation to realize Pareto optimal allocations, and the role of taxation as a possible cause of inflation. Special attention is paid to economies with gross substitutability. Bibliography 18 items.
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Bibliographic InfoArticle provided by New Economic Association in its journal Journal of the New Economic Association.
Volume (Year): (2010)
Issue (Month): 6 ()
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Lump sum taxation; equilibrium; pure exchange economy; regular economy; price adjustment;
Find related papers by JEL classification:
- C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- N. Gregory Mankiw & Matthew C. Weinzierl & Danny Yagan, 2009.
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- Mankiw, N. Gregory & Weinzierl, Matthew Charles & Yagan, Danny Ferris, 2009. "Optimal Taxation in Theory and Practice," Scholarly Articles 4263739, Harvard University Department of Economics.
- N. Gregory Mankiw & Matthew Weinzierl & Danny Yagan, 2009. "Optimal Taxation in Theory and Practice," NBER Working Papers 15071, National Bureau of Economic Research, Inc.
- Debreu, Gerard, 1972. "Smooth Preferences," Econometrica, Econometric Society, vol. 40(4), pages 603-15, July.
- Hahn, Frank H., 1973. "On optimum taxation," Journal of Economic Theory, Elsevier, vol. 6(1), pages 96-106, February.
- Debreu, Gerard, 1970. "Economies with a Finite Set of Equilibria," Econometrica, Econometric Society, vol. 38(3), pages 387-92, May.
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