Welfare-improving Government Behaviour and Inequality - Inspection Using a Heterogeneous-agent Model
AbstractGovernments 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.
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 Universidade do Porto, Faculdade de Economia do Porto in its series CEF.UP Working Papers with number 1103.
Length: 49 pages
Date of creation: Jun 2011
Date of revision:
government budget composition and debt; heterogeneous agent model; idiosyncratic shock; inequality; welfare.;
Find related papers by JEL classification:
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
- I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-02 (All new papers)
- NEP-DGE-2011-07-02 (Dynamic General Equilibrium)
- NEP-MAC-2011-07-02 (Macroeconomics)
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.:
- Floden, Martin, 2001.
"The effectiveness of government debt and transfers as insurance,"
Journal of Monetary Economics,
Elsevier, vol. 48(1), pages 81-108, August.
- Martin Floden, 2000. "The Effectiveness of Government Debt and Transfers as Insurance," Econometric Society World Congress 2000 Contributed Papers 1013, Econometric Society.
- Floden, Martin, 2000. "The Effectiveness of Government Debt and Transfers as Insurance," Working Paper Series in Economics and Finance 377, Stockholm School of Economics.
- Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2009.
"Quantitative macroeconomics with heterogeneous households,"
420, Federal Reserve Bank of Minneapolis.
- Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2009. "Quantitative Macroeconomics with Heterogeneous Households," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 319-354, 05.
- Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2009. "Quantitative Macroeconomics with Heterogeneous Households," NBER Working Papers 14768, National Bureau of Economic Research, Inc.
- S. Rao Aiyagari, 1994.
"Optimal capital income taxation with incomplete markets, borrowing constraints, and constant discounting,"
508, Federal Reserve Bank of Minneapolis.
- Aiyagari, S Rao, 1995. "Optimal Capital Income Taxation with Incomplete Markets, Borrowing Constraints, and Constant Discounting," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1158-75, December.
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
- António Afonso & Ludger Schuknecht & Vito Tanzi, 2010.
"Income distribution determinants and public spending efficiency,"
Journal of Economic Inequality,
Springer, vol. 8(3), pages 367-389, September.
- Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2008. "Income distribution determinants and public spending efficiency," Working Paper Series 0861, European Central Bank.
- António Afonso & Ludger Schknecht & Vito Tanzi, 2008. "Income Distribution Determinants and Public Spending Efficiency," Working Papers Department of Economics 2008/05, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Robert J. Barro, 1988.
"Government Spending in a Simple Model of Endogenous Growth,"
NBER Working Papers
2588, National Bureau of Economic Research, Inc.
- Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October.
- Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
- Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
- Martin FlodÈn, 2003.
"Public Saving and Policy Coordination in Aging Economies,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 105(3), pages 379-400, 09.
- Flodén, Martin, 2002. "Public Saving and Policy Coordination in Ageing Economies," CEPR Discussion Papers 3567, C.E.P.R. Discussion Papers.
- Aiyagari, S. Rao & McGrattan, Ellen R., 1998.
"The optimum quantity of debt,"
Journal of Monetary Economics,
Elsevier, vol. 42(3), pages 447-469, October.
- Krusell, P & Smith Jr, A-A, 1995.
"Income and Wealth Heterogeneity in the Macroeconomic,"
RCER Working Papers
399, University of Rochester - Center for Economic Research (RCER).
- Per Krusell & Anthony A. Smith & Jr., 1998. "Income and Wealth Heterogeneity in the Macroeconomy," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 867-896, October.
- Per Krusell & Anthony A. Smith, Jr., . "Income and Wealth Heterogeneity in the Macroeconomy," GSIA Working Papers 1997-37, Carnegie Mellon University, Tepper School of Business.
- Ke-young Chu & Hamid Reza Davoodi & Sanjeev Gupta, 2000. "Income Distribution and Tax and Government Social Spending Policies in Developing Countries," IMF Working Papers 00/62, International Monetary Fund.
- Salvador Barrios & Andrea Schaechter, 2008. "The quality of public finances and economic growth," European Economy - Economic Papers 337, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Imrohoruglu, Ayse, 1989. "Cost of Business Cycles with Indivisibilities and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1364-83, December.
- Marco Cagetti & Mariacristina De Nardi, 2005.
"Wealth inequality: data and models,"
Working Paper Series
WP-05-10, Federal Reserve Bank of Chicago.
- Barro, Robert J, 1979.
"On the Determination of the Public Debt,"
Journal of Political Economy,
University of Chicago Press, vol. 87(5), pages 940-71, October.
- Marimon, Ramon & Scott, Andrew (ed.), 1999. "Computational Methods for the Study of Dynamic Economies," OUP Catalogue, Oxford University Press, number 9780198294979, September.
- S. Rao Aiyagari & Ellen R. McGrattan, 2003. "The Optimum Quantity of Debt: Technical Appendix," Annals of Economics and Finance, Society for AEF, vol. 4(1), pages 193-217, May.
- S. Rao Aiyagari, 1993.
"Uninsured idiosyncratic risk and aggregate saving,"
502, Federal Reserve Bank of Minneapolis.
- Ana Castaneda & Javier Diaz-Gimenez & Jose-Victor Rios-Rull, 2003. "Accounting for the U.S. Earnings and Wealth Inequality," Journal of Political Economy, University of Chicago Press, vol. 111(4), pages 818-857, August.
- Huggett, Mark, 1993. "The risk-free rate in heterogeneous-agent incomplete-insurance economies," Journal of Economic Dynamics and Control, Elsevier, vol. 17(5-6), pages 953-969.
- Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
- 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.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ana Bonanca).
If references are entirely missing, you can add them using this form.