EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/46310
  
Title:Time-consistent fiscal policy under heterogeneity: Conflicting or common interests? PDF Logo
Authors:Angelopoulos, Konstantinos
Malley, James R.
Philippopoulos, Apostolis
Issue Date:2011
Series/Report no.:CESifo working paper: Fiscal Policy, Macroeconomics and Growth 3444
Abstract:This paper studies the aggregate and distributional implications of Markov-perfect taxspending policy in a neoclassical growth model with capitalists and workers. Focusing on the long run, our main findings are: (i) it is optimal for a benevolent government, which cares equally about its citizens, to tax capital heavily and to subsidise labour; (ii) a Pareto improving means to reduce inefficiently high capital taxation under discretion is for the government to place greater weight on the welfare of capitalists; (iii) capitalists and workers preferences, regarding the optimal amount of 'capitalist bias', are not aligned implying a conflict of interests.
Subjects:optimal fiscal policy
Markov-perfect equilibrium
heterogeneous agents
JEL:E62
H21
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

Files in This Item:
File Description SizeFormat
661600394.pdf251.49 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/46310

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.