Fiscal Policy in a Growth Model with Both Altruistic and Non Altruistic Agents

Philippe Michel and Pierre Pestieau

No 1994049, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper examines the long-run behavior of an overlapping-generations model with a population consisting of altruistic and non-altruistic agents. It also studies the effect of fiscal policy on aggregate capital accumulation and on the welfare of both types of agents. It shows that an increase in the relative number of non-altruists is Pareto-improving in the steady-state. It also shows that the introduction of public debt or unfunded social security has no effect on the long-run equilibrium but implies a transfer of resources from the non-altruistic to the altruistic agents. Finally, it indicates that inheritance taxation hurts not only the altruists but also the nonaltruists.

Keywords: altruism; Ricardian equivalence; fiscal policy (search for similar items in EconPapers)
Date: 1994-10-01
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Citations: View citations in EconPapers (23)

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Related works:
Journal Article: Fiscal Policy in a Growth Model with Both Altruistic and Nonaltruistic Agents (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1994049

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