The Effects of Redistributive Taxation in Credit Markets with Adverse Selection

14 Pages Posted: 5 Mar 2016 Last revised: 5 Aug 2019

See all articles by Anastasios Dosis

Anastasios Dosis

ESSEC Business School; University of Cergy-Pontoise - THEMA

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

Dosis, Anastasios, The Effects of Redistributive Taxation in Credit Markets with Adverse Selection (February 17, 2016). 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

University of Cergy-Pontoise - THEMA ( email )

33 boulevard du port
F-95011 Cergy-Pontoise Cedex, 95011
France

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