Topology of utility possibility frontiers of economies with Ramsey taxation
This paper establishes the generic size and structure of the second-best Pareto frontier and its various components in private ownership economies with Ramsey taxation. It provides conditions under which the second-best Pareto frontier of an economy with H consumers will have the expected structure of a H . 1-dimensional manifold. In a class of economies, it shows that, generically, while the jointly production and consumption ine cient component of the second-best Pareto manifold is a submanifold that also has a dimension equal to H . 1, the production e cient, consumption e cient, and the rstbest components are lower dimensional, and hence negligible in size, submanifolds. Thus, it formally demonstrates that the economies usually studied in the literature, where all second-best are production e cient, are extremely rare. Market prices cannot be used in lieu of social shadow prices in most economies for cost-bene t tests. This begs further research for recovering the true social shadow prices from the data in such economies.
|Date of creation:||2009|
|Contact details of provider:|| Postal: CV4 7AL COVENTRY|
Phone: +44 (0) 2476 523202
Fax: +44 (0) 2476 523032
Web page: http://www2.warwick.ac.uk/fac/soc/economics/
More information through EDIRC
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.:
- DEBREU, Gérard, "undated".
"Economies with a finite set of equilibria,"
CORE Discussion Papers RP
67, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Zeckhauser, Richard J & Weinstein, Milton C, 1974. "The Topology of Pareto-Optimal Regions with Public Goods," Econometrica, Econometric Society, vol. 42(4), pages 643-666, July.
- Hahn, Frank H., 1973. "On optimum taxation," Journal of Economic Theory, Elsevier, vol. 6(1), pages 96-106, February.
- Carvajal, Andrés & Polemarchakis, Herakles, 2011. "Idiosyncratic risk and financial policy," Journal of Economic Theory, Elsevier, vol. 146(4), pages 1569-1597, July.
- Keen, Michael & Lockwood, Ben, 2010.
"The value added tax: Its causes and consequences,"
Journal of Development Economics,
Elsevier, vol. 92(2), pages 138-151, July.
- Keen, Michael & Lockwood, Ben, 2007. "The Value Added Tax : Its Causes and Consequences," The Warwick Economics Research Paper Series (TWERPS) 801, University of Warwick, Department of Economics.
- Ben Lockwood & Michael Keen, 2007. "The Value-Added Tax; Its Causes and Consequences," IMF Working Papers 07/183, International Monetary Fund.
- Michael Keen & Ben Lockwood, 2007. "The Value Added Tax: Its Causes and Consequences," Economics Working Papers ECO2007/09, European University Institute.
- Robin W. Boadway, 1975.
"Cost-benefit Rules in General Equilibrium,"
Review of Economic Studies,
Oxford University Press, vol. 42(3), pages 361-374.
- Blackorby, Charles & Murty, Sushama, 2009. "Constraints on Income Distribution and Production Efficiency In Economies with Ramsey Taxation," The Warwick Economics Research Paper Series (TWERPS) 908, University of Warwick, Department of Economics.
- Atsushi Kajii & Antonio Villanacci & Alessandro Citanna, 1998.
"Constrained suboptimality in incomplete markets: a general approach and two applications,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(3), pages 495-521.
- Alessandro Citanna & Atsushi Kajii & Antonio Villanacci, 1998. "Constrained suboptimality in incomplete markets: a general approach and two applications," Post-Print hal-00479390, HAL.
- Guesnerie Roger, 1977.
"Financing public goods with commodity taxes : the tax reform view point,"
CEPREMAP Working Papers (Couverture Orange)
- Guesnerie, Roger, 1979. "Financing Public Goods with Commodity Taxes: The Tax Reform Viewpoint," Econometrica, Econometric Society, vol. 47(2), pages 393-421, March.
- J. A. Mirrlees, 1972. "On Producer Taxation," Review of Economic Studies, Oxford University Press, vol. 39(1), pages 105-111.
- Reinhorn, Leslie J., 2013.
"Production efficiency and excess supply,"
Mathematical Social Sciences,
Elsevier, vol. 65(2), pages 92-100.
- Fuchs, Gerard & Guesnerie, Roger, 1983. "Structure of Tax Equilibria," Econometrica, Econometric Society, vol. 51(2), pages 403-434, March.
- Guesnerie,Roger, 1998. "A Contribution to the Pure Theory of Taxation," Cambridge Books, Cambridge University Press, number 9780521629560, December.
When requesting a correction, please mention this item's handle: RePEc:wrk:warwec:912. 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: (Margaret Nash)
If references are entirely missing, you can add them using this form.