Endogenous growth in a model with heterogeneous agents and voting on public goods
AbstractWe consider a Barro-type endogenous growth model in which the government's purchases of goods and services enter into the production function. The provision of government services is financed by flat-rate (linear) income or lump-sum taxes. It is assumed that individuals differing in their discount factors vote on the tax rates. We propose a concept of voting equilibrium leading to some versions of the median voter theorem for steady-state equilibria, fully characterize steady-state equilibria and show that if the median voter discount factor is sufficiently low, the long-run rate of growth in the case of flat-rate income taxation is higher than that in the case of lump-sum taxation.
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Bibliographic InfoPaper provided by European University at St. Petersburg, Department of Economics in its series EUSP Deparment of Economics Working Paper Series with number Ec-01/10.
Length: 24 pages
Date of creation: 04 Aug 2010
Date of revision: 29 Sep 2010
Note: Presented at the 11th Annual Conference of the Association for Public Economic Theory (PET10, Istanbul, Turkey, June 25-27, 2010).
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More information through EDIRC
economic growth; taxation; voting;
Other versions of this item:
- Borissov, Kirill & Surkov, Alexander, 2010. "Endogenous growth in a model with heterogeneous agents and voting on public goods," MPRA Paper 27517, University Library of Munich, Germany.
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- 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
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-23 (All new papers)
- NEP-CDM-2011-01-23 (Collective Decision-Making)
- NEP-DGE-2011-01-23 (Dynamic General Equilibrium)
- NEP-FDG-2011-01-23 (Financial Development & Growth)
- NEP-PBE-2011-01-23 (Public Economics)
- NEP-POL-2011-01-23 (Positive Political Economics)
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