Fiscal policy with agents differing in altruism and in ability

Philippe Michel and Pierre PESTIEAU

No 2002049, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper presents an overlapping generations model of growth with individuals differing in productivity and altruism. Within such a model wealth is entirely held in the steady-state by the families with the highest degree of altruism. We then look at the macroeconomic and distributive effects of three fiscal policies: public debt, pay-as-you-go social security and estate taxation. Under plausible assumption we show that both public debt and social security are neutral A la Ricardo but increase inequality. We also show that a estate taxation can be Pareto worsening even though it can foster income equality.

Date: 2002-09-01
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Related works:
Working Paper: Fiscal Policy with Agents Differing in Altruism and in Ability (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:cor:louvco:2002049

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