Economics at your fingertips  

An Equilibrium Analysis of Fiscal Policy with Uncertainty and Incomplete Markets

David Easley, Nicholas Kiefer () and Uri M Possen

International Economic Review, 1993, vol. 34, issue 4, 935-52

Abstract: Insurance aspects of tax policies are studied in a simple intertemporal general equilibrium model in which agents are uncertain about both the future wage rates and the rate of return on capital. Taxation and lump-sum subsidy policies generally reduce employment, output, and the capital stock but, nonetheless, they can be structured to provide Pareto improvements on the incomplete market equilibrium. These policies provide insurance against individual shocks, not aggregate shocks. Examples of welfare maximizing tax schemes are provided using a simple computable general equilibrium model. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

Downloads: (external link) ... O%3B2-P&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Harold L. Cole

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing ().

Page updated 2019-08-08
Handle: RePEc:ier:iecrev:v:34:y:1993:i:4:p:935-52