Measuring the Welfare Impact of Fiscal Policy

James Anderson

No 272, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper is a guide to welfare cost measurement with all the basic elements of fiscal policy active in a representative consumer economy. By developing a simple dual framework which nevertheless is more general than the special cases usually employed, we are able to clear up several confusions in the literature on the welfare cost of tax changes. We argue for the natural dominance of a single measure of welfare cost. We do a similar analysis of the parallel literature on government project evaluation, and are able to clear up the confusing concept of the marginal social cost of funds.

Keywords: Marginal cost of funds; shadow price (search for similar items in EconPapers)
JEL-codes: H2 (search for similar items in EconPapers)
Date: 1994-08
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:272

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