Capital income taxation, public capital and matching frictions in an overlapping generations model

Minoru Watanabe ()
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Minoru Watanabe: Graduate School of Economics, Kobe University

No 2320, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: This study develops a standard overlapping generations model to investigate the role of capital income tax within an endogenous growth framework. It introduces capital income tax to finance public investment as a source of endogenous growth. Furthermore, we assume that matching frictions give rise to unemployment. It was found that an increase in capital income tax can contribute to improvements in economic growth, employment, and welfare.

Pages: 19 pages
Date: 2023-12
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