Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/61048
Authors: 
Economides, George
Philippopoulos, Apostolis
Year of Publication: 
2012
Series/Report no.: 
CESifo Working Paper: Fiscal Policy, Macroeconomics and Growth 3875
Abstract: 
This paper studies the aggregate and distributional implications of introducing user fees for publicly provided excludable public goods into a model with consumption and income taxes. The setup is a neoclassical growth model where agents differ in earnings and second-best policy is chosen by a Ramsey government. Our main result is that the adoption of user fees by the Ramsey government not only increases aggregate efficiency, but it also decreases inequality. This result is in contrast to common view and policy practice.
Subjects: 
user fees
Ramsey taxation
efficiency
inequality
JEL: 
H40
H20
D60
Document Type: 
Working Paper

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