Fiscal Policy with Agents Differing in Altruism and in Ability
AbstractThis Paper explores the effects of a menu of inter-generational fiscal policies (public debt financed by taxes, PAYG social security system and inheritance taxation) in an overlapping generations model with perfect altruism. It generalizes the model by Barro (1974) by introducing intra-generational heterogeneity. In other words, households differ in productivity and altruism. Within such a model wealth is entirely held in the steady-state by the families with the highest degree of altruism. Under plausible assumptions both public debt and social security are neutral à la Ricardo, while increasing inequality. Also, estate taxation can be Pareto worsening even though it fosters income equality.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4254.
Date of creation: Feb 2004
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- MICHEL, Philippe & PESTIEAU, Pierre, 2002. "Fiscal policy with agents differing in altruism and in ability," CORE Discussion Papers 2002049, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-29 (All new papers)
- NEP-MAC-2004-02-29 (Macroeconomics)
- NEP-PBE-2004-02-29 (Public Economics)
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.:
- Falk, Ita & Stark, Oded, 2001.
"Dynasties and Destiny: On the Roles of Altruism and Impatience in the Evolution of Consumption and Bequests,"
London School of Economics and Political Science, vol. 68(272), pages 505-18, November.
- Stark, Oded & Falk, Ita, 2001. "Dynasties And Destiny: On The Roles Of Altruism And Impatience In The Evolution Of Consumption And Bequests," Discussion Papers 18749, University of Bonn, Center for Development Research (ZEF).
- Stark, Oded & Falk, Ita, 2000. "Dynasties and Destiny: On the Roles of Altruism and Impatience in the Evolution of Consumption and Bequests," Economics Series 88, Institute for Advanced Studies.
- Weil, Philippe, 1987. "Love thy children : Reflections on the Barro debt neutrality theorem," Journal of Monetary Economics, Elsevier, vol. 19(3), pages 377-391, May.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Nourry, Carine & Venditti, Alain, 2001.
"Determinacy of Equilibrium in an Overlapping Generations Model with Heterogeneous Agents,"
Journal of Economic Theory,
Elsevier, vol. 96(1-2), pages 230-255, January.
- Nourry, C. & Vendetti, A., 1998. "Determinacy of Equilibrium in an Overlapping Generations Model with Heterogenous Agents," G.R.E.Q.A.M. 98a02, Universite Aix-Marseille III.
- MICHEL, Philippe & PESTIEAU , Pierre, 1994.
"Fiscal Policy in a Growth Model with Both Altruistic and Non Altruistic Agents,"
CORE Discussion Papers
1994049, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- MICHEL, Ph. & PESTIEAU, P., . "Fiscal policy in a growth model with both altruistic and nonaltruistic agents," CORE Discussion Papers RP -1301, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Smetters, Kent, 1999. "Ricardian equivalence: long-run Leviathan," Journal of Public Economics, Elsevier, vol. 73(3), pages 395-421, September.
- John Laitner, 2001.
"Secular Changes in Wealth Inequality and Inheritance,"
wp020, University of Michigan, Michigan Retirement Research Center.
- Laitner, John, 2001. "Secular Changes in Wealth Inequality and Inheritance," Economic Journal, Royal Economic Society, vol. 111(474), pages 691-721, October.
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
- Joseph E. Stiglitz, 1978.
"Notes on Estate Taxes, Redistribution, and the Concept of Balanced Growth Path Incidence,"
in: Research in Taxation, pages 137-150
National Bureau of Economic Research, Inc.
- Stiglitz, Joseph E, 1978. "Notes on Estate Taxes, Redistribution, and the Concept of Balanced Growth Path Incidence," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages S137-50, April.
- N. Gregory Mankiw, 2000.
"The Savers-Spenders Theory of Fiscal Policy,"
American Economic Review,
American Economic Association, vol. 90(2), pages 120-125, May.
- N. Gregory Mankiw, 2000. "The Savers-Spenders Theory of Fiscal Policy," NBER Working Papers 7571, National Bureau of Economic Research, Inc.
- N. Gregory Mankiw, 1999. "The Savers-Spenders Theory of Fiscal Policy," Harvard Institute of Economic Research Working Papers 1888, Harvard - Institute of Economic Research.
- Becker, Robert A, 1980. "On the Long-Run Steady State in a Simple Dynamic Model of Equilibrium with Heterogeneous Households," The Quarterly Journal of Economics, MIT Press, vol. 95(2), pages 375-82, September.
- Helmuth Cremer & Pierre Pestieau, 2003.
"Wealth transfer taxation: a survey,"
DELTA Working Papers
2003-20, DELTA (Ecole normale supérieure).
- Helmuth Cremer & ) & Pierre Pestieau, 2003. "Wealth Transfer Taxation: A Survey," Public Economics 0311003, EconWPA.
- Helmuth Cremer & ) & Pierre Pestieau, 2004. "Wealth Trasfer Taxation: A Survey," Public Economics 0401004, EconWPA.
- Helmuth Cremer & Pierre Pestieau, 2003. "Wealth Transfer Taxation: A Survey," CESifo Working Paper Series 1061, CESifo Group Munich.
- Helmuth Cremer & Pierre Pestieau, 2003. "Wealth Transfer Taxation: A Survey," Economics Working Paper Archive wp_394, Levy Economics Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.