The effects of redistributive taxation in credit markets with adverse selection

Anastasios Dosis

Economics Letters, 2019, vol. 184, issue C

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 improvements 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 (search for similar items in EconPapers)
JEL-codes: D82 D86 H25 H82 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:184:y:2019:i:c:s0165176519302939

DOI: 10.1016/j.econlet.2019.108595

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