Positional Preferences and Efficiency in a Dynamic Economy

Thomas Aronsson, Sugata Ghosh and Ron Wendner

MPRA Paper from University Library of Munich, Germany

Abstract: In an endogenous growth model, we characterize the conditions under which positional preferences for consumption and wealth do not cause inefficiency and derive an optimal tax policy response in cases where these condi- tions are not satisfied. The concerns for relative consumption and relative wealth partly emanate from social comparisons with people in other coun- tries. We distinguish between a (conventional) welfarist government and a non-welfarist government that does not attach any social value to rela- tive concerns. We also compare the outcome of Nash-competition among local/national governments with the resource allocation implied by a global social optimum both under welfarism and non-welfarism.

Keywords: Positional preferences; endogenous growth; wealth; intertemporal distor- tion; welfarism; non-welfarism; inter-country externalities; Pigouvian taxation (search for similar items in EconPapers)
JEL-codes: D62 (search for similar items in EconPapers)
Date: 2021-04-03
New Economics Papers: this item is included in nep-gro and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/108335/1/MPRA_paper_98425.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/108335/9/MPRA_paper_108335.pdf original version (application/pdf)

Related works:
Journal Article: Positional preferences and efficiency in a dynamic economy (2023)
Working Paper: Positional Preferences and Efficiency in a Dynamic Economy (2021)
Working Paper: Positional Preferences and Efficiency in a Dynamic Economy (2020)
Working Paper: Positional Preferences and Efficiency in a Dynamic Economy (2020)
Working Paper: Positional Preferences and Efficiency in a Dynamic Economy (2020)
Working Paper: Positional Preferences and Efficiency in a Dynamic Economy (2020)
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:pra:mprapa:108335

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().