Fiscal Policy with Agents Differing in Altruism and in Ability
This Paper explores the effects of a menu of inter-generational fiscal policies (public debt financed by taxes, PAYG social security system and inheritance taxation) in an overlapping generations model with perfect altruism. It generalizes the model by Barro (1974) by introducing intra-generational heterogeneity. In other words, households differ in productivity and altruism. Within such a model wealth is entirely held in the steady-state by the families with the highest degree of altruism. Under plausible assumptions both public debt and social security are neutral à la Ricardo, while increasing inequality. Also, estate taxation can be Pareto worsening even though it fosters income equality.
|Date of creation:||Feb 2004|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
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.:
- Falk, Ita & Stark, Oded, 2001.
"Dynasties and Destiny: On the Roles of Altruism and Impatience in the Evolution of Consumption and Bequests,"
London School of Economics and Political Science, vol. 68(272), pages 505-18, November.
- Stark, Oded & Falk, Ita, 2001. "Dynasties And Destiny: On The Roles Of Altruism And Impatience In The Evolution Of Consumption And Bequests," Discussion Papers 18749, University of Bonn, Center for Development Research (ZEF).
- Stark, Oded & Falk, Ita, 2000. "Dynasties and Destiny: On the Roles of Altruism and Impatience in the Evolution of Consumption and Bequests," Economics Series 88, Institute for Advanced Studies.
- Nourry, C. & Vendetti, A., 1998.
"Determinacy of Equilibrium in an Overlapping Generations Model with Heterogenous Agents,"
98a02, Universite Aix-Marseille III.
- Nourry, Carine & Venditti, Alain, 2001. "Determinacy of Equilibrium in an Overlapping Generations Model with Heterogeneous Agents," Journal of Economic Theory, Elsevier, vol. 96(1-2), pages 230-255, January.
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
- Weil, Philippe, 1987. "Love thy children : Reflections on the Barro debt neutrality theorem," Journal of Monetary Economics, Elsevier, vol. 19(3), pages 377-391, May.
- MICHEL, Philippe & PESTIEAU , Pierre, 1994. "Fiscal Policy in a Growth Model with Both Altruistic and Non Altruistic Agents," CORE Discussion Papers 1994049, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Joseph E. Stiglitz, 1978.
"Notes on Estate Taxes, Redistribution, and the Concept of Balanced Growth Path Incidence,"
in: Research in Taxation, pages 137-150
National Bureau of Economic Research, Inc.
- Stiglitz, Joseph E, 1978. "Notes on Estate Taxes, Redistribution, and the Concept of Balanced Growth Path Incidence," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages S137-50, April.
- N. Gregory Mankiw, 2000.
"The Savers-Spenders Theory of Fiscal Policy,"
American Economic Review,
American Economic Association, vol. 90(2), pages 120-125, May.
- N. Gregory Mankiw, 1999. "The Savers-Spenders Theory of Fiscal Policy," Harvard Institute of Economic Research Working Papers 1888, Harvard - Institute of Economic Research.
- N. Gregory Mankiw, 2000. "The Savers-Spenders Theory of Fiscal Policy," NBER Working Papers 7571, National Bureau of Economic Research, Inc.
- Laitner, John, 2001.
"Secular Changes in Wealth Inequality and Inheritance,"
Royal Economic Society, vol. 111(474), pages 691-721, October.
- John Laitner, 2001. "Secular Changes in Wealth Inequality and Inheritance," Working Papers wp020, University of Michigan, Michigan Retirement Research Center.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Smetters, Kent, 1999. "Ricardian equivalence: long-run Leviathan," Journal of Public Economics, Elsevier, vol. 73(3), pages 395-421, September.
- Robert A. Becker, 1980. "On the Long-Run Steady State in a Simple Dynamic Model of Equilibrium with Heterogeneous Households," The Quarterly Journal of Economics, Oxford University Press, vol. 95(2), pages 375-382.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:4254. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.