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A large scale OLG model for the analysis of the redistributive effects of policy reforms

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  • Bucciol, Alessandro
  • Cavalli, Laura
  • Fedotenkov, Igor
  • Pertile, Paolo
  • Polin, Veronica
  • Sartor, Nicola
  • Sommacal, Alessandro

Abstract

The paper presents a large scale overlapping generation model with heterogeneous agents, where the household is the decision unit. We calibrate the model for three European countries – France, Italy and Sweden – which show marked differences in the design of some public programmes. We examine the properties in terms of annual and life cycle redistribution of a number of tax-benefit programmes, by studying the impact of removing from our model economies some or all of them. We find that whether one considers a life cycle or an annual horizon, and whether behavioural responses are accounted for or not, has a large impact on the results. The model may provide useful insights for policy makers on which kind of reforms are more likely to achieve specific equity objectives.

Suggested Citation

  • Bucciol, Alessandro & Cavalli, Laura & Fedotenkov, Igor & Pertile, Paolo & Polin, Veronica & Sartor, Nicola & Sommacal, Alessandro, 2017. "A large scale OLG model for the analysis of the redistributive effects of policy reforms," European Journal of Political Economy, Elsevier, vol. 48(C), pages 104-127.
  • Handle: RePEc:eee:poleco:v:48:y:2017:i:c:p:104-127
    DOI: 10.1016/j.ejpoleco.2016.08.005
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    References listed on IDEAS

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    Cited by:

    1. repec:ebl:ecbull:eb-18-00240 is not listed on IDEAS
    2. repec:gam:jrisks:v:6:y:2018:i:2:p:48-:d:143783 is not listed on IDEAS
    3. Fedotenkov, Igor, 2018. "Corruption vs reforms: Why do voters prefer the former?," MPRA Paper 89581, University Library of Munich, Germany.

    More about this item

    Keywords

    Redistribution; Fiscal policy; Computable OLG models;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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