Download This PaperThe Effects of Redistributive Taxation in Credit Markets with Adverse Selection
14 Pages Posted: 5 Mar 2016 Last revised: 29 Aug 2019
Date Written: February 17, 2016
Abstract
This paper studies the effects of redistributive taxation in credit markets with adverse selection and shows that there exists a range of taxes that creates Pareto improvement relative to the (zero-tax) market allocation by increasing aggregate investment. For sufficiently high taxes, an increase in the safe interest rate can be accompanied by an increase in investment.
Keywords: Credit Market; Adverse Selection; Taxation; Redistribution; Welfare
JEL Classification: D82; D86; H82; H25
Suggested Citation: Suggested Citation
Dosis, Anastasios, The Effects of Redistributive Taxation in Credit Markets with Adverse Selection (February 17, 2016). Economics Letters, Vol. 184, 2019, Available at SSRN: https://ssrn.com/abstract=2742603 or http://dx.doi.org/10.2139/ssrn.2742603
Anastasios Dosis (Contact Author)
ESSEC Business School
3 Avenue Bernard Hirsch
B.P 50105
Cergy - Pontoise Cedex, NA 95021
France
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