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An analysis on optimal taxation and on policy changes in an endogenous growth model with public expenditure

Author

Listed:
  • Thomas Renstrom

    () (University of Durham (UK))

  • Luca Spataro

    () (Dipartimento di Economia e Management, University of Pisa (Italy))

Abstract

In this work we analyse the issue of optimal taxation and of policy changes in an endogenous growth model driven by public expenditure, in the presence of endogenous fertility and labour supply. While normative analysis confirms the Chamley-Judd result of zero capital income tax, positive analysis reveals that the presence of endogenous fertility produces different results as for the effects of taxes on total employment.

Suggested Citation

  • Thomas Renstrom & Luca Spataro, 2015. "An analysis on optimal taxation and on policy changes in an endogenous growth model with public expenditure," Public Finance Research Papers 12, Istituto di Economia e Finanza, DIGEF, Sapienza University of Rome.
  • Handle: RePEc:gfe:pfrp00:00012
    as

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    File URL: http://www.digef.uniroma1.it/sites/default/files/pubblicazioni/economia/research-papers/e-pfrp-n-12.pdf
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    References listed on IDEAS

    as
    1. Spataro, Luca & Renström, Thomas I., 2012. "Optimal taxation, critical-level utilitarianism and economic growth," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 727-738.
    2. De Bonis, Valeria & Spataro, Luca, 2005. "Taxing Capital Income As Pigouvian Correction: The Role Of Discounting The Future," Macroeconomic Dynamics, Cambridge University Press, vol. 9(04), pages 469-477, September.
    3. Cremer, Helmuth & Gahvari, Firouz & Pestieau, Pierre, 2006. "Pensions with endogenous and stochastic fertility," Journal of Public Economics, Elsevier, vol. 90(12), pages 2303-2321, December.
    4. Yew, Siew Ling & Zhang, Jie, 2009. "Optimal social security in a dynastic model with human capital externalities, fertility and endogenous growth," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 605-619, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Taxation; endogenous fertility; critical level utilitarianism; population;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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