This paper analyses recent contributions to the theory of household saving and examines empirical evidence on the subject. It focuses on (a) the derivation and estimation of first-order conditions for a consumer's optimum lfe-cycle consumption plan, (b) the conditions under which such conditions...

An index of Inequality is constructed which decomposes into two components, corresponding to vertical and "horizontal" equity respectively. Horizontal equity Is defined in terms of changes in the ordering of a distribution. The proposed index is a function to two inequality aversion parameters....

Empirical tests of the life cycle model have focused on its implications for the level of a household's total net worth and paid little attention to changes in portfolio composition over the life cycle. In this paper, we examine a new survey of the asset holdings of 6,010 U.S households and show...

There has been very little study of the consequences of pension wealth for the composition of household portfolios. Using individual data for 10,118 Canadian households we estimate the portfolio effect of pension wealth. Because most households do not own all of the assets which we are able to...

The integrated treatant of optimal taxation and public expenditure presented here is based on the dual relationship between the prices of private goods and the quantities of public goods. In this paper we derive analogues of Roy's identity and the Slutsky equation for the case of public goods....

In this paper, we examine a new survey of 6,010 U.S.households and estimate a model for the allocation of total net worth among different assets. The paper has three main aims. The first is to investigate the extent to which a conventional portfolio choice model can explain the differences in...

Over the last decade increasing use has been made of individual household data to analyse the gains and losses from tax reform. Much attention has been paid to the econometric estimation of models of household responses to taxes. But these models yield valid estimates of the welfare consequences...

In section 1.2 we shall examine the optimal taxation of capital and labor incomes in a simple growth model and derive formulae for the optimal tax rates. These are used in section 1.3 to evaluate claims that abolishing capital income taxes would lead to large welfare gains. Inflation is...

This working paper presents Chapter 7 of a book to be published for the National Bureau of Economic Research by the University of Chicago Press. The point of the book is to compare taxes on income from capital in four countries,accounting for corporate, personal, and property taxes, and...

This paper presents a model in which the realizations of stochastic tax and depreciation rates determine both the level and growth rate of output: externalities to investment - learning by watching - are characterized by diminishing returns, yielding a nonlinear "technical progress function"....