|
|
|
|
||||
|
||||
Time-Consistent Fiscal Policy Under Heterogeneity: Conflicting or Common InterestsKonstantinos AngelopoulosAthens University of Economics and Business - Department of International and European Economic Studies James B. Malleyaffiliation not provided to SSRN Apostolis PhilippopoulosAthens University of Economics and Business - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); University of Essex May 17, 2011 CESifo Working Paper Series No. 3444 Abstract: This paper studies the aggregate and distributional implications of Markov-perfect tax-spending policy in a neoclassical growth model with capitalists and workers. Focusing on the long run, our main findings are: (i) it is optimal for a benevolent government, which cares equally about its citizens, to tax capital heavily and to subsidise labour; (ii) a Pareto improving means to reduce inefficiently high capital taxation under discretion is for the government to place greater weight on the welfare of capitalists; (iii) capitalists and workers preferences, regarding the optimal amount of "capitalist bias", are not aligned implying a conflict of interests.
Number of Pages in PDF File: 28 Keywords: optimal fiscal policy, Markov-perfect equilibrium, heterogeneous agents JEL Classification: E620, H210 working papers seriesDate posted: May 18, 2011Suggested CitationContact Information
|
|
|||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo6 in 0.594 seconds
