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Reexamination of Dynamic Efficiency with Taxation on Land

Author

Listed:
  • Kim, K-S.
  • Lee, J.

Abstract

This paper examines the possibility of overaccumulation of capital in an overlapping generations economy with land. With zero population growth rate, the steady state equilibrium is dynamically efficient. Imposition of property tax on land, however, distorts the arbitrage condition and can generate dynamic inefficiency, whereas a tax on rental incomes or capital gains preserves dynamic efficiency. Even with a positive growth rate in population, property tax can still generate dynamic inefficiency.

Suggested Citation

  • Kim, K-S. & Lee, J., 1996. "Reexamination of Dynamic Efficiency with Taxation on Land," Papers 96-97-03, California Irvine - School of Social Sciences.
    • Handle: RePEc:fth:calirv:96-97-03
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    Citations

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    Cited by:

    1. Stefan Homburg, 2014. "Overaccumulation, Public Debt and the Importance of Land," German Economic Review, Verein für Socialpolitik, vol. 15(4), pages 411-435, November.
    2. repec:spo:wpmain:info:hdl:2441/56k383m9o9kpb1g6f8rvv74ok is not listed on IDEAS
    3. Odran Bonnet & Guillaume Flamerie de La Chapelle & Alain Trannoy & Etienne Wasmer, 2019. "Secular Trends in Wealth and Heterogeneous Capital: Land is Back... and Should Be Taxed," Working Papers hal-03570837, HAL.
    4. Selahattin Imrohoroglu, 2023. "Mpk," CIGS Working Paper Series 24-002E, The Canon Institute for Global Studies.
    5. Odran Bonnet & Guillaume Flamerie de La Chapelle & Alain Trannoy & Etienne Wasmer, 2019. "Secular Trends in Wealth and Heterogeneous Capital: Land is Back... and Should Be Taxed," Sciences Po Economics Discussion Papers hal-03570837, HAL.
    6. Kim, Kyung-Soo & Lee, Jaewoo, 1997. "Reexamination of dynamic efficiency with taxation on land," Economics Letters, Elsevier, vol. 57(2), pages 169-175, December.
    7. repec:spo:wpmain:info:hdl:2441/1eob9f9aas9q18hfjsiqhggvi2 is not listed on IDEAS
    8. Odran Bonnet & Guillaume Flamerie de la Chapelle & Alain Trannoy & Etienne Wasmer, 2019. "Secular trends in Wealth and Heterogeneous Capital: Land is back...and should be taxed," SciencePo Working papers hal-03541411, HAL.
    9. Odran Bonnet, 2018. "Individual housing choices and aggregate housing prices: discrete choice models revisited with matching models," Sciences Po publications info:hdl:2441/3bhpicpe2q8, Sciences Po.
    10. Hellwig, Martin F., 2020. "Property taxes and dynamic inefficiency: A correction of a “correction”," Economics Letters, Elsevier, vol. 197(C).
    11. Homburg, Stefan, 2014. "Property taxes and dynamic efficiency: A correction," Economics Letters, Elsevier, vol. 123(3), pages 327-328.
    12. repec:spo:wpecon:info:hdl:2441/1eob9f9aas9q18hfjsiqhggvi2 is not listed on IDEAS

    More about this item

    Keywords

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    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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