Fiscal Policy with Agents Differing in Altruism and Ability

Bibliographic Data

ID9723907
AuthorsPhilippe Michel (0000-0001-8455-8332, corresponding author), Pierre Pestieau (0000-0002-0452-7278)
Year2005
Volume72
Issue285
Pages121-135
Publication date2005-02-01
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1111/j.0013-0427.2005.00404.x
OpenAlexW2203015662
LanguageEN
Citations received3
References cited11

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

Crowding out · Debt · Economics · Estate · Fiscal policy · Inequality · Macroeconomics · Market economy · Microeconomics · Monetary economics · Overlapping generations model · Pareto principle · Productivity · Public economics · Public good · Social security · Economic theories and models · Financial Literacy, Pension, Retirement Analysis · Fiscal Policy and Economic Growth · Finance

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