Optimal Public Policy with Endogenous Mortality
AbstractUsing a monetary pure-exchange overlapping generations model, where the probability of survival of the young agents depends upon share of government expenditure on health, education and infrastructure, we analyze the welfare-maximizing policy mix between explicit and implicit taxation. We show that increases in the survival probability lead to an increase in the reliance on seigniorage as a welfare maximizing outcome. However, for our results to hold, the seigniorage tax base must be large enough for the benevolent planner to use the inflation tax.
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Bibliographic InfoPaper provided by University of Pretoria, Department of Economics in its series Working Papers with number 200829.
Length: 15 pages
Date of creation: Aug 2008
Date of revision:
Monetary Pure Exchange Overlapping Generations Model; Probability of Survival; Welfare Maximizing Policy Mix;
Other versions of this item:
- Rangan Gupta & Emmanuel Ziramba, 2010. "Optimal public policy with endogenous mortality," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(3), pages 241-249.
- Rangan Gupta & Emmanuel Ziramba, 2010. "Optimal public policy with endogenous mortality," Journal of Policy Reform, Taylor and Francis Journals, vol. 13(3), pages 241-249.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- I1 - Health, Education, and Welfare - - Health
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-31 (All new papers)
- NEP-DGE-2008-08-31 (Dynamic General Equilibrium)
- NEP-HEA-2008-08-31 (Health Economics)
- NEP-PBE-2008-08-31 (Public Economics)
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