Bilateral Redistribution

Christopher Chambers and Juan Moreno-Ternero

No 21.07, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: We explore the implications of three basic and intuitive axioms for income redistribution problems: continuity, no transfer paradox and stability. The combination of the three axioms characterizes in the two-agent case a large family of rules, which we call threshold rules. For each level of total income in society, a threshold is considered for each agent. It is impossible for both agents to be below their respective thresholds. If an agent’s income is below the threshold, the difference is redistributed from the other agent; otherwise, the rule imposes laissez-faire.

Keywords: income redistribution; axioms; stability; continuity; no transfer paradox (search for similar items in EconPapers)
JEL-codes: D63 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2021
New Economics Papers: this item is included in nep-des
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Citations: View citations in EconPapers (4)

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Journal Article: Bilateral redistribution (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:21.07

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