Socially Optimal Redistribution and Growth: A Further Warning on the Welfare Significance of Representative Consumers' Preferences

Volker Grossmann

FinanzArchiv: Public Finance Analysis, 2001, vol. 57, issue 2, 182-196

Abstract: In this paper, it is illustrated in a simple balanced growth model with redistributive capital income taxation that it is generally misleading to attribute welfare significance to the preferences of a representative consumer, if lump sum redistribution is unfeasible. This result holds even if a representative agent exists for all endowment distributions, i.e. even if there always exists an endowment distribution such that utility of the representative consumer has welfare significance for any social welfare function. Moreover, it can be concluded from our example that, in general, the net return to capital should be lower than the (social) marginal productivity of capital.

JEL-codes: D11 D30 H20 (search for similar items in EconPapers)
Date: 2001
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/socially-op ... 16280015221012904986
Fulltext access is included for subscribers to the printed version.

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: https://EconPapers.repec.org/RePEc:mhr:finarc:urn:sici:0015-2218(200103)57:2_182:soraga_2.0.tx_2-_

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

Access Statistics for this article

FinanzArchiv: Public Finance Analysis is currently edited by Alfons Weichenrieder, Ronnie Schöb and Jean-François Tremblay

More articles in FinanzArchiv: Public Finance Analysis from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().