In this paper, we set up a three-period stochastic overlapping generations model to analyze the implications of income inequality and mobility for demand for redistribution and social insurance. We model the size of two different public programs under the welfare state. We investigate...

In this paper, we set up a three-period stochastic overlapping generations model to analyze the implications of income inequality and mobility for demand for redistribution and social insurance. We model the size of two different public programs under the welfare state. We investigate...

This paper studies implementation of the social optimum in a model of habit formation. We consider taxes that address inefciencies due to negative consumption externalities, imperfect competition, and self-control problems. Our contributions are to: i) account for producers market power; and ii)...