IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-11-00127.html
   My bibliography  Save this article

Capital Accumulation and Social Welfare in Fiscal Federalism and the Unitary System

Author

Listed:
  • Wempi Saputra

    (Graduate School of Economics, Nagoya University)

Abstract

This paper presents an analysis on capital accumulation and social welfare in fiscal federalism and the unitary system by using an overlapping generations model. We introduce three possible cases pertaining to how government tax policy towards individuals could be formulated: the government imposes tax on young and old generations under fiscal federalism (case A); the government imposes tax only on young generation under fiscal federalism (case B) as well as under the unitary system (case C). We show that, the level of steady-state capital accumulation as well as social welfare in case A is greater than those in cases B and C if certain conditions are satisfied. Our results suggest that, fiscal federalism is more preferable than the unitary system.

Suggested Citation

  • Wempi Saputra, 2011. "Capital Accumulation and Social Welfare in Fiscal Federalism and the Unitary System," Economics Bulletin, AccessEcon, vol. 31(2), pages 1223-1236.
  • Handle: RePEc:ebl:ecbull:eb-11-00127
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I2-P115.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Capital accumulation; Fiscal federalism; Unitary system; Overlapping generations;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-11-00127. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.