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Welfare-improving Government Behaviour and Inequality - Inspection Using a Heterogeneous-agent Model

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Author Info

  • Miguel Viegas

    (GOVCOPP, DEGEI, Universidade de Aveiro)

  • Ana Paula Ribeiro

    ()
    (Faculdade de Economia da Universidade do Porto and CEF.UP)

Abstract

Governments behavior is expected to be non-neutral in terms of impacts on both welfare and inequality. In spite of their multivariate form, a tentative assessment of such inequality impacts can be provided by using a general equilibrium model with heterogeneous-agents and where wealth and income distribution is determined endogenously. Using a model capable of exploring the relationship between fiscal policy variables and the endogenous cross-section distribution of income, wealth, consumption and leisure, this paper produces a welfare and inequality analysis of several equilibriums resulting from different combinations of debt levels and of government budget variables. Moreover, such assessment is based on the empirical reality of the EU countries.

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Bibliographic Info

Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series CEF.UP Working Papers with number 1103.

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Length: 49 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:por:cetedp:1103

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Keywords: government budget composition and debt; heterogeneous agent model; idiosyncratic shock; inequality; welfare.;

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Cited by:
  1. Viegas, Miguel & Ribeiro, Ana Paula, 2013. "The Dutch experience: Assessing the welfare impacts of two consolidation strategies using a heterogeneous-agent framework," Economic Modelling, Elsevier, vol. 32(C), pages 351-360.
  2. Miguel Viegas & Ana Paula Ribeiro, 2011. "Assessing welfare impacts of some debt-consolidation episodes in the European Union," CEF.UP Working Papers 1106, Universidade do Porto, Faculdade de Economia do Porto.

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