The Friedman rule in an overlapping-generations model with nonlinear taxation and income misreporting

This paper models an overlapping-generations economy that includes money and is populated with individuals of different skills. They face a nonlinear income tax schedule and can engage in tax evasion. Money serves two purposes: the traditional one, modeled through a money-in-the-utility-function, and to facilitate tax evasion. It shows that income tax evasion leads to the violation of the Friedman rule that will otherwise hold.

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Year of publication:	2012-06-27
Authors:	Gahvari, Firouz ; Micheletto, Luca
Institutions:	Nationalekonomiska Institutionen, Uppsala Universitet
Subject:	Monetary policy \| fiscal policy \| redistribution \| the Friedman rule \| tax evasion \| overlapping-generations \| second best

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Extent:	application/pdf
Series:	Working Paper Series, Center for Fiscal Studies.
Type of publication:	Book / Working Paper
Notes:	Published as Gahvari, Firouz and Luca Micheletto, 'The Friedman rule in an overlapping-generations model with nonlinear taxation and income misreporting' in Journal of Public Economics , 2014, pages 10-23. The text is part of a series Working Paper Series, Uppsala Center for Fiscal Studies Number 2012:9 36 pages
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; H21 - Efficiency; Optimal Taxation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010945033