search query: @indexterm Utility functions / total: 27
reference: 9 / 27
Author: | Michel, P. Paul, T. |
Title: | Time-consistent linear taxation and redistribution in an overlapping-generations framework |
Journal: | Oxford Economic Papers
2002 : APR, VOL. 54:2, p. 247-269 |
Index terms: | Taxation Utility functions Statistical methods Models Economic theory |
Freeterms: | Comparative analysis |
Language: | eng |
Abstract: | Time-consistent labour and capital income linear taxation are studied using an infinite-horizon overlapping-generations model of a small open economy. Individuals have different productivities and the government intervenes for purely redistributive purposes. The study of time-consistent taxation requires the introduction of borrowing restrictions in the economy. The time-consistent solution is characterised and alternative solutions based on a simple tax rule are considered. The existence and the uniqueness of the time-consistent solution is demonstrated using a log-linear utility function. Numerical comparisons btw. time-consistent and time-inconsistent linear taxation are provided: the importance of being able to make commitment decreases when the differences btw. individuals increase. |
SCIMA