The non-cooperative provision of public goods is analysed in the context of a two-stage game in which club size is determined endogenously. Equilibrium club size and voluntary labour supply are shown to be inefficient. The impact of optimally-chosen fiscal policies using simple instruments is...

Despite the fact that all developed economies levy broadly-based indirect taxes alongside direct taxes, little theory is devoted to explaining the direct-indirect tax mix. Our purpose is to show that if different taxes have different evasion characteristics, some optimal tax mix emerges...

Rochet (1989) showed that with distortionary income taxes, social insurance is a desirable redistributive device when risk and ability are negatively correlated. This finding is reexamined when ex post moral hazard and adverse selection are included, and under different informational...

An overlapping generations model is constructed in which individual wealth is related to educational attainment, and in which liquidity constraints my induce children to invest in a sub-optimal level of education given their ability. Borrowing for educational attainment is obtained from within...

This paper addresses the question of the optimal taxation of labour and interest income in an overlapping generations model with two unobservable characteristics, ability and inheritance. We assume realistically that saving can only be taxed anonymously, whereas the tax on labour earnings can be...