A Dynamic Model of Redistribution, Inheritance, and Inequality.
Comparing steady states of an overlapping-generations economy, Gary S. Becker and Nigel Tomes (1979) and James B. Davies (1986) have noted that redistributive taxation can be disequalizing. This paper solves for the full transition path of inequality after a redistributive tax increase. The authors find, in contrast to the steady-state results, that redistribution "works' in the first generation under quite general conditions, even when fully anticipated by all previous generations. Further, inequality is likely to fall for several generations before approaching its new steady-state level from below.
Year of publication: |
1991
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Authors: | Davies, James B. ; Kuhn, Peter J. |
Published in: |
Canadian Journal of Economics. - Canadian Economics Association - CEA. - Vol. 24.1991, 2, p. 324-44
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Publisher: |
Canadian Economics Association - CEA |
Saved in:
Online Resource
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