Fiscal policy in a growth model with bequest-as-consumption

Philippe Michel and Pierre PESTIEAU

No 2001009, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper analyses a growth model wherein saving results from bequestas-consumption. It first looks at the market equilibrium and at the optimal solution. Then it turns to the issue of decentralizing the optimal solution with various taxes and transfers. Depending on the available instruments, either a first-best or a second-best optimum can be achieved. Throughout the paper the results are contrasted with those obtained in the standard altruistic (dynastic) model and in the overlapping generation model without intergenerational transfers.

Keywords: bequests; Þscal policy; optimal growth (search for similar items in EconPapers)
JEL-codes: D64 H21 E62 (search for similar items in EconPapers)
Date: 2001-02-01
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Persistent link: http://EconPapers.repec.org/RePEc:cor:louvco:2001009

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