Work

Fiscal Policy with Agents Differing in Altruism and Ability

Year: 2005

Type: article

Abstract: This paper explores the effects of a menu of intergenerational fiscal policies (public debt financed by taxes, PAYG social security system, inheritance taxation) in an overlapping‐generations model with perfect altruism. It generalizes Barro's model by introducing intragenerational heterogeneity; in other words, households differ in productivity and altruism. Within such a model, wealth is held entirely in the steady state by those families with the highest degree of altruism. Under plausible assumptions, both public debt and social security are neutral à la Ricardo, while inequality increases. Also, estate taxation can be Pareto‐worsening even though it fosters income equality.

Source: Economica

DOI: 10.1111/j.0013-0427.2005.00404.x

Authors: Philippe Michel, Pierre Pestieau

Institutions: Centre National de la Recherche Scientifique, Aix-Marseille Sciences Economiques, University of Liège

Language: English

Topic: Fiscal Policies and Political Economy

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: No poverty, Reduced inequalities

Open Access status: green

OpenAlex ID: W2203015662

FWCI: 3.203

Cites: 15

Cited by: 24

Related to: 20