Inheriting money can be a problem since the new wealth might sap the beneficiaries’ incentive to work. Or it could do the opposite, by facilitating entrepreneurship among those whose ambition to start a business had been stymied by a lack of cash. Recent evidence suggests inheritance-related...

This paper examines the set of Pareto efficient allocations in a finite period Mirrlees (1971, 1976) economy; each period represents a lifetime for an agent who cares about the utility of his descendants. In making Pareto comparisons, we use an interim concept of efficiency, and consider an...

The main goal of this article is to describe the attitudes towards bequests as the motive for saving up for old age. The article reports the results of our own qualitative and quantitative research. The reasons for additional, voluntary saving up for old age, as seen in the conducted qualitative...

This paper studies optimal taxation of bequests in a model where altruistic parents and their offspring disagree on the offspring's labor supply decision. I show that whenever offspring is too lazy from the parent's perspective and there are income effects on labor supply, optimal policy...

There are competing 'views' on the economic effects of debt finance. One view argues that tax and debt finance have identical effects on various economic measures, a view sometimes termed 'Ricardian Equivalence'. However, this 'Ricardian view' remains controversial, with other views (the...

The objective of this paper is to test the existence of Ricardian Equivalence in Lesotho using annual data for two sample periods, 1980-2014 and 1988-2014. This proposition is important and has crucial implications for tax policy. Household consumption, government debt, government expenditure,...

Two of the most common measures adopted by the government to stimulate the economy are increasing government borrowings and implementing tax cuts. These tax cuts are financed through increased debt. According to the Ricardian equivalence theory, the consumers will not change their current...