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Pàgina inicial > Documents de recerca > Working papers > Estate taxes, consumption externalities, and altruism |
Publicació: | CREA-Barcelona Economics, 2005 |
Descripció: | 27 pàg. |
Resum: | We study how the introduction of consumption externalities affects the optimality of the dynamic equilibrium in an economy displaying dynastic altruism. When the bequest motive is inoperative consumption externalities affect the intertemporal margin between young and old consumption and thus modify the intertemporal path of aggregate consumption and capital. The optimal tax policy that solves this intertemporal suboptimality consists of a tax on capital income and a pay-as-you-go social security system. The latter solves the excess of capital accumulation due to the inoperativeness of the bequest motive and the former solves the suboptimal allocation of consumption due to consumption externalities. When the bequest motive is operative consumption externalities only cause an intratemporal misallocation of consumption but do not affect the optimality of the capital stock level. This suboptimal allocation of consumption implies in turn that the path of bequest deviates also from optimality. The optimal tax policy in this case consists of an estate tax and a capital income tax. |
Ajuts: | Ministerio de Ciencia y Tecnología SEC2003-00306 Ministerio de Ciencia y Tecnología SEJ2005-03753 Generalitat de Catalunya 2005 / SGR-00447 Generalitat de Catalunya 2005 / SGR-00984 |
Drets: | Tots els drets reservats. |
Llengua: | Anglès |
Col·lecció: | CREA working paper; 232 |
Document: | Working paper ; recerca ; Article ; Versió publicada |
Matèria: | Bequests ; Consumption externalities ; E13 ; E21 ; E62 ; Optimal tax rates |
Publicat a: | CREA Centre de Referència en Economia Analítica Working Paper Series, 2005 |
27 p, 370.0 KB |